KUALA LUMPUR, March 22 — The lack of financial allocation from the government has made it impossible for Perbadanan Nasional Bhd (Pernas), which has the role to lead the development of the franchise industry in Malaysia, to fully implement it.
According to the Auditor-General’s Report (LKAN) 2020 Series 1 released today, Pernas used company funds from other activities such as investment and property rental in providing franchise financing facilities to the targeted public.
The report recommended Pernas strengthen the implementation mechanism and proposed improvements to the implementation of existing programmes so that Pernas can continue to be channelled government funds to make the Franchise Development Programme a success.
Apart from that, Pernas is also advised to ensure that the process related to the application and approval of funding is in accordance with the prescribed procedures and time period.
“About 20 per cent 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 the Single Customer Credit Limit (SCCL) confirmation date and the offer letter date are not in the Pernas Business Management System (S3P),” the report said.
LKAN said 29.5 per cent or 33 accounts were only locked into the system after approval was obtained, where the period taken to lock into the system ranged from three to 290 days.
For the management of financing repayment collection, 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.
As a result, Pernas is 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, LKAN said the overall financial position of Pernas was stable, with total assets exceeding liabilities in the current year as well as increased cash flow during the period.
For the period of 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 of its principal activities namely franchise financing and other activities namely equity investment, money market investment, real estate investment and subsidiary company investment. — Bernama