Nurul Nadhirah bt Abdul Kudus 0719914
Development finance institutions (DFIs)
The government has established development finance institutions to promote investments in the manufacturing and agriculture sectors. The main objective of DFIs is to provide long-term funds tailored to the need of borrowers. Both Federal and State Governments provide funding in the form of equity participation and low interest loans. The Development Finance Institutions Act 2002, (DFIA) was enacted to provide a comprehensive regulatory and supervisory framework to ensure safe and sound financial management of the DFIs.
Savings institutions
Saving institution is to complement the commercial banks and finance companies as the major deposit taking institutions. It promotes savings among middle and lower income groups in the rural areas that are not adequately served by the commercial banks and finance companies which are the Bank Simpanan National, Co-operatives Societies and Bank Kerjasama Rakyat Malaysia Berhad.
Unit trusts
It serves as a medium through which small individual investors can acquire a share in a diversified portfolio of corporate securities. Unit trusts come under the purview of the Securities Commission. The size of a unit trust shall not exceed 500 million units .Types of unit trusts according to ascending order of risk profile
Money market funds
Bonds funds
Balanced Funds
Income funds
Growth and income funds
Growth funds
Aggressive growth funds
There are three parties to a trust deed. They are the managers, the investors and the trustees. The manager is the promoters of the fund, in the form of a management company. The investor is the beneficiaries, who invest their funds with the managers after scrutinizing the prospectus. They also hold unit trust certificates as evidence of their investment. While the trustees, act as the neutral person to hold the assets on behalf of all the investors. The assets invested by the fund managers are registered in the name of the trustee.
Property trusts
Property trust funds possess the potential to pose as an invaluable investment vehicle to the investing public at large. Apart from being another growth-oriented investment vehicle, property trust funds offer diversification to investors’ portfolio, as it does not necessarily move in correlation with the rest of the market. Further, as an asset class, real estate can be a very good investment, in terms of providing long-term capital appreciation and current income to investors. Notwithstanding, property trust funds in Malaysia have generally not been able to engage investors’ interest in the manner that it was originally hoped to achieve. This may be due to a variety of reasons, namely investors’ inclination towards direct ownership of properties, and an illiquid property market, to name a few.
Housing credit institutions
The Malaysia Building Society Berhad (MBSB) operating in Peninsular Malaysia and the Borneo Housing Mortgage Finance Berhad (BHMF) operating in Sabah and Sarawak,were set up to meet the rapidly rising needs for housing finance. Their positions as the leader in the home mortgage market in their respective territories have been challenged, especially in the 1970's, by competition from the commercial banks, the finance companies and the Government (which extends loans to public servants at concessionary rates) and threatened by resource constraints. At present, the MBSB has been specializing in the financing of low-cost housing.
Cagamas Berhad
Cagamas Berhad (“Cagamas”), the National Mortgage Corporation and leading securitisation house, was established in 1986 to promote the secondary mortgage market in Malaysia. Cagamas has, through the years, evolved and diversified its business model from that of a national mortgage corporation seeking to aid Malaysian with affordable housing, to becoming a leader in securitisation.
Cagamas issues debt securities to finance the purchase of housing loans and other consumer receivables from financial institutions, selected corporations and the Government. The provision of liquidity at a reasonable cost to the primary lenders of housing loans encourages further financing of houses at an affordable cost.
Leasing companies
In the Malaysian financial sector, leasing companies constitute a relatively small but growing sub-sector where they source their funds from shareholder funds, borrowings from financial institutions and inter-company borrowing
Credit token companies
Credit token company is any business where a token, being a cheque, card, voucher, stamps, booklet, coupon, form or other document or thing is given or issued to a person, referred to as customer, by the person carrying on the business, referred to as issuer. The issuer undertakes that on the production of the token, whether or not some other action is also required, the issuer will supply cash, goods or services on credit or on the production of the token to a third party, whether or not any other action is also required, the 3rd party supplies goods, cash or services, the issuer will pay the 3rd party for them, whether or not deducting any discount or commission, in return for payment to be made thereafter to the issuer by the customer.
Reference:
www.cagamas.com.my
http://www.sc.com.my/ENG/html/resources/guidelines/gline-property.pdf
