KUALA LUMPUR – The lack of financial allocations from the government has made it impossible for Perbadanan Nasional Bhd (Pernas) to fully lead the development of the franchise industry in Malaysia, according to the Auditor-General’s Report 2020 Series 1 released today.
The report said that Pernas used company funds from other activities such as investment and property rental to provide franchise-financing facilities to the targeted public.
The report recommended that it strengthen its implementation mechanism and proposed improvements to the implementation of existing programmes so it can continue to receive government funds to make the Franchise Development Programme a success.
Pernas was also advised to ensure that its processes related to the application and approval of funding are in accordance with the prescribed procedures and time period.
“About 20% or 15 of the 75 application accounts approved before and in March 2020 were processed beyond the seven working days. The delay period ranged from four to 76 days.
“Meanwhile, 37 accounts approved after March 2020 could not determine the processing period because the data on Single Customer Credit Limit confirmation dates and offer letter dates are not in the Pernas Business Management System,” the report said.
The report said 29.5% or 33 accounts were only locked into the system after approval was obtained, with the period taken to lock into the system ranging from three to 290 days.
For the management of financing repayment collections, the balance of non-performing financing (NPF) amounted to RM26.72 million involving 388 accounts.
Meanwhile, a total of 640 accounts amounting to RM122.5 million were written off for the period from 2013 to September 2021.
No reminders and notices were issued against 109 accounts of borrowers with write-off status amounting to RM35.17 million before the accounts were classified as NPF.
Pernas was advised to take proactive and effective measures to collect the arrears of financing accounts with NPF status to reduce the total outstanding balance.
However, based on the financial analysis conducted, the report said Pernas’ overall financial position was stable, with total assets exceeding liabilities in the current year as well as increased cash flow during the period.
For 2018 to 2020, the revenue generated from the company’s operations amounted to RM222.42 million of the total revenue of RM281.78 million.
The company’s operations consist principally of franchise financing and other activities, namely equity investment, money market investment, real estate investment, and subsidiary company investment. – Bernama, March 22, 2022
