It has allocated RM2 million in funds for the scheme which will also not have a fixed repayment schedule and allow the borrowers to repay when they have the money.
Chief Executive Officer of KFHMB, Jamelah Jamaluddin, said the loan scheme was part of the company’s corporate social responsibility (CSR) programme and Kelantan was the first state for the pioneering project.
“The RM2 million allocation came from the revenue collected from penalties paid by borrowers who had defaulted in their loan repayments. These monies cannot be considered as financial earnings from the syariah viewpoint.
“These monies which have now amounted to more than RM10 million, will be used for our CSR programme and we are starting with RM2 million in Kelantan,” she told reporters after the official opening of KFHMB’s Kota Baharu branch here Tuesday.
Sultan Kelantan, Sultan Muhammad V graced the opening of the RM2 million branch office here, making it the ninth KFHMB office to be officially opened in the country.
Jamelah said KFHMB was the first financial institution to have started the policy of using penalties received from borrowers for the welfare of the local people.
Under the new scheme, KFHMB will offer loans to single mothers to help start their businesses and achieve financial independence and relief in bringing up their children.
“Although it is a loan, we will not be charging any interest. We will also not fix any repayment schedule as they can pay back when they can afford to,” Jamelah said.
The minimum loan given will be RM3,000 and the maximum will be RM30,000.
On what attracted KFHMB to Kelantan, Jamelah said the Kelantanese had a strong sense of investment and they especially liked buying and investing in gold.
She said since KFHMB opened up here in January, it has sold 20kg of the 995 gold with many of the investors buying the gold opting to open up either a fixed savings account or current account.
“One gram of gold at current value is RM149.43,” she said.
KFHMB started operating as a full-fledged Islamic bank in Malaysia in 2005, fully owned by its holding company, Kuwait Finance House K.S.C.
The bank has a paid up capital of US$650 million (RM2.015 billion) and US$100 million (RM310 million) for its second stage.