Govt waives RM8.3 billion Felda settlers’ loans

(FMT) – The government has agreed to abolish a portion of Felda settlers’ loans amounting to RM8.3 billion, subject to certain conditions, Prime Minister Muhyiddin Yassin announced today.

In a speech in conjunction with Felda Settlers’ Day 2021, Muhyiddin said the move involves streamlining the loans of early settlers.

These include loans for replanting exercises (92,441 settlers), fertilisers (52,180 settlers), FGV Holdings Bhd’s shares (38,043 settlers) and development capital (6,711 settlers).

Muhyiddin said the burden of the loans on settlers would be reduced by some 80%.

“The average loan repayment amount is expected to drop from between RM800 and RM1,000 a month to only between RM250 and RM300 a month for palm oil smallholders and RM150 a month for rubber smallholders, which is a reasonable and affordable amount.”

Muhyiddin said the loan issue needs to be corrected to allow Felda to “restart”, a move that was necessary for it to bounce back and be on par with other international plantations.

On strengthening Felda, Muhyiddin said the government planned to approve the issuance of RM9.9 billion in government-guaranteed sukuk to fund enhancements to Felda’s business model.

“A portion of this will go towards the restructuring of loans taken from financial institutions and to take over FGV.”

He also said Felda could meet its target of returning to profitability by 2023 by increasing involvement in upstream businesses, while “smart agriculture” and technology, will help improve Felda’s operations and save some RM200 million in costs over five years.

Muhyiddin also said the government will introduce a settlers’ development programme (PPP) to encourage settlers to become entrepreneurs, making them less dependent on the prices of commodities and give them a diverse source of income.

“With a vast agricultural land bank, ‘smart agriculture’ skills, and the PPP, I believe Felda will be in the best position to spearhead the national food industry sector within a decade.”