3BF to angkasa

Proposal to initiate a RM3 Billion Build Budget Fund [3BF] Copyrights of JoshuaYCKong@May2010
1. Preliminary
1.1 The intention is to approach ANGKASA and Bank Rakyat for an initiation fund to start a RM3 Billion Build Budget Fund for cooperative societies in Sabah.

1.2 Cooperative societies in Sabah need to be given special attention to catch up with the Peninsula Counterparts. Like all other funds allocation, Sabah has been always neglected for lack of knowledge and prompt action and whatever reasons.

1.3 Sabah is still relatively resources rich and cooperative societies is one way to exploit the opportunities still available.

1.4 The impression of the performance of most cooperatives societies in Sabah is poor hence most cooperative societies are very small.

1.5 To kick start the new cooperative societies to new height generally and specifically, such societies need fresh injections of working capital. The entrance fees, the contribution and the shares subscription would be inadequate to toil for the searches of the business opportunities.

1.6 Suruhanjaya Koperasi Malaysia or SKM may have certain provision to help new cooperatives but how many actually get those grants which are subject to strict scrutiny and supporting documentation. The procedure of applying for such grants are delaying the potential of new businesses.

1.7 So we have to seriously consider the new approaches to energise new cooperatives or dormant cooperatives with adequate funding where that really matters.

2. Build Budget.
2.1 For any cooperative society, when is investment really taking place? We can only pursue investments after the new or dormant cooperatives are fully operating with the most basic items such as stationery of the right quality, equipped with appropriate facilities to operate an office, the full time workers are remunerated accordingly.

2.2 The cooperative societies can only start to invest in any ventures after the executive officers or ALK or Board of Directors have the opportunities to review all projects adequately.

2.3 So the working of the study, review and selection of any project is both laborious and costly. Any new cooperative societies would lack fund to do any such effort if it depends on the little share subscription from the members. It is ironic that such share subscribed fund is not to be used for such purpose towards investing in any project. If that is the case, the little membership entrance fees is too meagre for any operation of the cooperatives societies.

2.4 In the present scenarios, most cooperative societies would have to look forward to the possibilities of joint venture with partners who are willing to fund certain projects. If such joint ventures are not forthcoming, such cooperative societies are left to natural deaths.

2.5 Some cooperatives may have some special privilege, and even then we still need to do the needful towards that possibility of any project to proceed.

2.6 When the cooperative remains small due to the vicious circle of the public not knowing what to expect from any cooperative society, it is inadequately funded in search for any project.

2.7 We can go on with all the set back for lack of fund right from the day any cooperative society meant for business to perform.

2.8 So we need to have a build budget for all new /dormant/ very small cooperative societies to be equipped with the fundamental needs like stationery, office equipment, communication facilities, computers and accessories, working allowances, working papers and an office space.

2.9 As much as possible instead of paying cash/cheque for the grants to the individual cooperative society, there is a need of a system where grant in kinds be implemented. The implementation body of 3BF [3BFIB] would have a schedule of items and suppliers for such items to be issued to the cooperative societies which then just apply for the package and sign for such items to the value of the grant in kinds. 3BFIP can be authorised to buy these items in bulk or even import them through local agents. 3BFIP would also oversees such packages to be utilised accordingly.

2.10 For the office space, 3BFIP can buy certain office spaces or office blocks to be shared by all cooperative societies at affordable rates and also to share some common facilities.

2.11 So the 3 BF would be allocated certain amounts for each specific sectors for different packages including the major one like office blocks and preparation of working papers.. The working papers can be prepared for common industries rather than each cooperative society doing their own with local scenario as amended and adopted.

2.12 The 3BF can be also utilised for certain specific projects to be jointly undertaken by the cooperative movement especially those essential infrastructure projects such as water, electricity, and transports which are beyond the means of any cooperative society in Sabah to undertake.

3. The 3BF can be procured in three methods namely:-
3.1. RM1 billion fund from banking and financial institutions including Government allocations, and urgently required to build up all the basic infrastructure of the cooperative societies and the various commercial projects. The lead bank can be Bank Rakyat and supported by ANGKASA.

3.2. RM1 billion fund from private initiative based on the concept of sort of franchise in raising finance for the projects of the cooperative societies to be self sustaining. The scheme would be presented in a detailed paper to be worked out. This scheme would be linked to the various facilities including trading operations and e-commerce already in place by the energised cooperative movements in increasing numbers and much accelerated memberships with much higher purchasing power.

3.3. RM1 billion fund from the return of the various cooperative movement in its profit by a certain percentage back to the 3BFIP within the reasonable time span like an internal revolving fund to be known as 3BFF.

3.4 It is expected that 3BF would stimulate RM30 billions and more of activities in a decade within the cooperative movement.

[Copyrights of JoshuaYCKong@May2010]

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4. Management of 3BF
4.1 The 3BFIB would be managed by a board of twelve with a Chairman and a Chief Executive Officer plus an advisory council of different sectors to ensue the smooth implementation of 3BF and 3BFF. 3BFIP would be based in Kota Kinabalu possibly with branches in other major regions where the needs are substantial. We may need a review conference [3BFC] annually.

5. Immediate needs for 3BF
5.1 A launching fund of say RM3 millions would be needed to finance the working committee and the working papers within the shortest possible time say within 3 months to lay out the detailed concept and operation manual for the 3BF for the concerned parties to participate in paragraph 3.1 When the concept is accepted, cooperative societies can simultaneously gain access to such 3BF through the conventional banking system.

5.2 3BF can also commence processing cooperative societies as to their requirements.

5.3 3BF to identify and allocate appropriate amount of fund for certain sectors for the purpose of expediting the activation of cooperative movement.

6. Review of 3BF
6.1 The review of the performance of 3BF and 3BFIB would be done as regularly as desirable with possible monthly monitoring. A detailed report would be made available.

7. Conclusion
With an ad hoc visionary committee as proposed and initiated by Koperasi Pengguna Sabah Bhd anchored by Angkasa and facilitated by Bank Rakyat Bank Persatuan and later by Coop Bank (Angkasa Bank), the cooperative movement would attract much more attention from all sectors in Sabah in particular and Malaysia in general.

The preparation and launching fund of RM3 million as considered necessary would contribute to the motion to set up all the preliminary infrastructure towards the establishment of RM3 Billion Build Budget Fund or 3BF.

This is an historic landmark paper for the cooperative movement in Sabah to erase all those negative perception albeit misplaced somehow of the public at large to enable greater numbers to join and contribute to the cooperative movement in talents, resources in both quality and quantity.

Many both inside and outside the cooperative movement may have great ideas and the set backs are obvious for lack of appropriate funds. So with 3BF, we can make the cooperative movement a new beginning to harness all the potentials with the best approaches forward. The cooperative movement must be strong to provide the corporate social responsibility.


Prepared by Joshua Y. C. Kong, Chartered Accountant, Chairman of Koperasi Pengguna Sabah Bhd, Author of Books of Issues in Sabah & Malaysia. 012 8380897; 088 247823 (also fax), justknock7@pd.jaring.my; jkong823@streamyx.com, jknow823@gmail.com; P. O. Box 11923, 88821 Kota Kinabalu, Sabah. Copyrights of JoshuaYCKong@May2010