PTPTN turns to CIMB for a loan to help fund more student loans

KUALA LUMPUR, July 14 — For the first time ever the National Higher Education Fund Corporation (PTPTN) is resorting to commercial financing to help reduce its reliance on government funding.

CIMB Group has extended a RM1.5 billion Islamic loan to PTPTN, of which repayment will be over a period of ten years. The loan is guaranteed by the government.

Higher Education Minister Datuk Seri Khaled Nordin said PTPTN needed RM4.2 billion to finance students this year and of which, RM3 billion would be obtained commercially while the remaining RM1.2 billion through internally generated funds.

“We don’t need to raise the other RM1.5 billion yet. If we do it now, we’ll need to pay the interest. When the need arises, then only we will raise it,” he told reporters after witnessing the agreement signing ceremony between CIMB and PTPTN here today.

PTPTN, established under the National Higher Education Act 1997, is an organisation tasked with managing and providing financing for Malaysian students who are eligible to pursue studies at local institutions of higher learning.

Khaled said it was the government’s responsibility to provide loans to eligible higher education students but they would have to be grateful for it and repay the loans so as not to deprive others of the same opportunity.

Interests on the their loans were actually paid by the government, otherwise it would be passed on to students, he said and added that the percentage of PTPTN loan repayments was on the increase as the government had put in place measures to ensure a better flow of payment.

He also said that the country was on track to achieve the 40 per cent target of having those aged between 17 and 23 receive tertiary education.

“Many countries want to learn from us in terms of our higher education, including having PTPTN to help students,” he said.

Meanwhile, PTPTN chairman Datuk Dr Mohamad Shahrum Osman said the repayment of loans in 2008 showed an increase with the organisation receiving RM1.19 billion from 659,880 loans that were supposed to pay back by May 2009.

Since its inception in 1997, he said, PTPTN had received RM5.295 billion from the government.

In 2003, it borrowed a total of RM13 billion from the Pension Trust Fund and the Employees Provident Fund to continue financing students at local higher education institutions. — Bernama