The Association of Banks in Malaysia chairman, Dr Rozali Mohamed Ali, said the association welcomed the government's call to look into ways of supporting businesses and entrepreneurs through less reliance on collateral as a basis for lending.
Prime Minister and Finance Minister Datuk Seri Abdullah Ahmad Badawi said that loans would be given to prospective entrepreneurs, based on their business plans and cash flow projections, to start their business ventures if they did not have any collateral.
The Cabinet made the decision to assist prospective entrepreneurs who had viable ideas but lacked capital to set up business.
"With greater competition among financial institutions and the paradigm shift in risk management, banks are improving managerial capabilities to assess credit-worthy loans based on future cash flows.
