Kuala Lumpur - The Ministry of Plantation and Commodities (KPK) is considering simplifying the loan process from banks to oil palm smallholders in the upcoming Budget 2025.

Minister Datuk Seri Johari Abdul Ghani announced that in Budget 2024, the government had allocated a RM100 million hybrid scheme, which includes a 50% grant and a 50% loan, to implement the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS 2.0).

Addressing Loan Application Challenges

Datuk Seri Johari acknowledged the challenges that oil palm smallholders face when applying for bank loans for replanting due to stringent conditions imposed by banks.

"Although it is a 50% loan and 50% grant, we have noticed that many smallholders struggle to secure financing because they cannot meet numerous criteria," he said.

Plans for Future Simplification

The minister stated that the ministry is addressing these challenges and plans to propose ways to simplify the 50% loan portion in the next budget to better assist smallholders with trees over 25 years old.

He made these remarks during a question-and-answer session in the Senate, responding to a supplementary question from Senator Datuk Lim Pay Hen about incentives for oil palm replanting and feedback on the TSPKS 2.0 initiative.

Source: New Straits Times