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Felda explains reduction on cost of living loan

28 Mar 2019 / 23:14 H.

KUALA LUMPUR: Felda today explained that the decision to reduce the cost of living loan and advance from yield from RM1,500 a month to RM 1,000 a month is inevitable based on its current critical financial condition.

In a statement issued by its Corporate Communication Unit, Felda said it was facing financial challenges to meet its commitment of RM500 million a year towards cost of living loan and advance from yield.

Felda drew attention that, until to date, it had used internal funds of around RM7.5 billion to finance settlers’ loans.

‘’Felda’s priority now is to settle arrears to contractors and suppliers especially the co-operatives belonging to the settlers which are involved in palm oil operations such as transporting and harvesting.

“If the payments to the contractors and suppliers are late, plantation productivity and settlers’ incomes will be affected,“ said the statement.

According to the statement, the settlers’ leadership institutions such as the Felda Settlers Consultation Committee, Malaysia Felda Youth Council and We Are Children of Felda (Kami Anak Felda) had agreed to the reduction based on Felda’s financial capability and the decision of the Felda Board of Directors on Dec 13, 2018.

‘’With the reduction, on average, the debts of settlers for the cost of living loan and advance from yield can be reduced from RM99,000 to RM71,000 for every settler who has taken the loan,“ said Felda.

He said the reduction in the loans of the settlers would help to reduce the commitment of the settlers to repay their loans to Felda, namely, from an average of RM550 a month to RM390 a month.

The Felda NGO Consensus Council (Majlis Permuafakatan NGO Felda) yesterday was reported to have urged the Felda top management to withdraw the circular on the reduction in the payment. — Bernama

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