The recently released National Audit Report 2009 warned that PTPTN’s revolving funds could run critically low as it had only managed to collect 48% of its loans in the last three years (2008-2010). In the report, Auditor-General Tan Sri Ambrin Buang set a 70% collection rate target for PTPTN.
The Public Accounts Committee’s (PAC)’s audit report found that many PTPTN borrowers had been making late payments due, in part, to delays by PTPTN in issuing letters of claim for repayment. This was in turn due to PTPTN’s unintegrated and semi-automated systems.
In 2009, PTPTN had only recovered RM1.51 billion or 47% of the RM3.19 billion due that year. As at Dec 31, 2009, PTPTN had approved payments totaling RM31.39 billion for 1.46 million borrowers.
One of the more startling points raised by the audit report was that PTPTN’s own projection showed that it would face a cash flow deficit of RM45.89 billion until the 11th Malaysia Plan (11MP), from 2016 to 2020.
As such, PTPTN would need additional funds of RM21.66 billion under the 11MP, RM15.67 billion under the 10th Malaysia Plan (2011-2015) and RM8.56 billion under the Ninth Malaysia Plan (2006-2010), the report said.
According to the audit report, PTPTN had required RM14.1 billion in funds from 2007 to 2009 and had obtained long-term borrowings (five- and 10-year loans) totaling RM16 billion, of which RM14 billion was guaranteed by the government.
PTPTN also receives subsidies from the Ministry of Finance to pay for borrowing costs of RM6.29 billion.
The bulk of PTPTN’s loans are from the Employees Provident Fund (EPF), amounting to RM12 billion. PTPTN has also borrowed RM1.5 billion from CIMB Bank Bhd, AmBank (Malaysia) Bhd and RM500 million from the Retirement Fund Inc (KWAP).
The national auditors also noted that PTPTN’s borrowing costs had increased its financial burden, given that the interest rates ranged between 3.6% to 5.3% compared with the 1% to 3% interest imposed by PTPTN on its borrowers.
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