KUALA LUMPUR (April 9): Touch ‘n Go Group (TNG Group) has recently been in the spotlight with its latest micro-loan product, GOpinjam, which charges borrowers interest rates between 8% and 36% per year.
With this addition to its suite of services offered via its Touch ‘n Go eWallet, the group presents itself more as a digital bank even if it has not applied for a digital banking license.
Nevertheless, the group’s chief executive, Effendy Shahul Hamid, said that TNG group did not need to transform into a bank and stressed that he was comfortable with its position in the e-wallet industry, being the “middleman” between users and financial institutions.
He sees huge opportunities for TNG Group through the business strategy he has chosen to adopt.
Regarding GOpinjam’s interest rates, Effendy explains that the rates are designed to cover the cost of the products, which are inherently high risk. He adds that the micro-loans offered through GOpinjam cater to a market segment that typically relies on unlicensed lenders and offer them a safer and better alternative to such borrowers.
Read more about it in this week’s issue of The Edge Malaysia weekly like Effendy explains the rationale for tariffs and also the way forward for the band.
The second cover focuses on the restructuring of highways in Malaysia which will be undertaken by Amanat Lebuhraya Rakyat (ALR) – an entity no one had heard of until last Monday – when it offered to buy four highways owned mainly by Gamuda Bhd and Lingkaran. Trans Kota Holdings Bhd for RM5.48 billion.
The four highway concession companies and respective highways to be taken over by ALR are Kesas Sdn Bhd (Kesas Expressway), Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (SMART Tunnel), Sistem Penyuraian Trafik KL Barat Sdn Bhd (SPRINT Expressway), and Lingkaran Trans Kota Sdn Bhd (Damansara-Puchong Expressway or LDP).
ALR will finance the acquisition via a sukuk to be issued, in which sukuk holders will be reimbursed from the net proceeds of the toll collection. When the sukuk is fully repaid, the LRA must return the highways to the government. An integral feature of the proposal is the extension of motorway concession periods from six to 10 years.
In return, toll rates remain and collection will cease when the proceeds are sufficient to redeem the sukuk. The target date for all of this to happen is May 2032.
For the rakyat, the toll rates remain the same under the proposal, and for the concession companies, they get money from expensive road activity. For its part, the government would no longer have to pay compensation to pay concessionaires to ensure that toll rates are not increased.
So, is this agreement really a victory for all stakeholders?
Lily The Edge Malaysiainterview with the deputy general manager of the Gamuda group, Mohammed Rashdan Mohd Yusof. In the accompanying story, we take a look at what other highways could potentially be monetized using the ALR mechanism.