QUESTION 4

a) Explain the differences between term loan and personal loan. (5m)

Term loan is a loan which you borrow from a bank for a specified repayment
schedule and a floating interest rate. Term loans is normally a loan for
specific purpose and upon securities against which and purpose for which
and purpose for which the loan has been given.
Personal loan is a loan which is borrower borrow for his personal use. Which
mean lending of amount for a defined terms but without any security.

b) Describe briefly the objectives for the establishment of the following

institution: (15m)

i) Malaysian industrial development financial (MIDF)

The MIDF is establish as Malaysia’s maiden development finance

institution MIDF has evolved and transformed itself into a diversified
group. It purpose of ensuring access to financing for manufacturing
based small and medium enterprises (SMEs), and as part of Malaysia’s
post-independence strategy to accelerate development of the
industrial sector.

ii) Bank Pembangunan Malaysia Berhad

The objective of Malaysia Development Bank is to provide medium to

long term financing to capital intensive industries, which include
infrastructure projects, maritime, technology, and oil and gas sector.
The bank was establish to promote reverse investment and export of
strategic sectors such as capital goods, infrastructure projects,
shipping, value added manufactured products and to facilities the
entry of Malaysian companies to new markets, particularly to the
non-traditional markets.
iii) The Agro Bank

The objective of Agro Bank is to promote Malaysia’s sound

agricultural development. To co-ordinate and supervise the grant of
credit from public funds for agricultural purposes by the various
persons or bodies of persons whether incorporated or
unincorporated. Also to provide loans, advances and other credit
facilities for the development of agriculture sector and agriculture
related business.

iv) Sabah Development Bank Berhad

The objective of Sabah Development Bank Berhad is to be the leading

development financial institution in the State of Sabah and to be the
DFI that remains on the cutting edge in Malaysia. It determine to
venture into every aspect of development banking for both public and
private sectors.

v) Sabah Credit Corporation

Objective to help and contribute towards the socio economic

development of the state. In its capacity as a financing agency. Sabah
Credit Corporation complements the state governments efforts by
providing or facilitating the grant of financial credits to promote and
encourage private investment involving agriculture, light industry,
development of rural and urban housing, shop houses and particularly
public utilities and amenities.