FIN368

CREDIT MANAGEMENT
BM1195D
INDIVIDUAL ASSIGNMENT
ISSUES ON CREDIT MANAGEMENT
PERSONAL LOAN FOR MLM
PREPARED FOR,

PREPARED BY,

PERSONAL LOAN FOR JOINING MLM BUSINESS

In 2013, A fresh graduate student has being influence by her friend for joining MLM and
making personal loan from 3 different banks that cost of RM30,000. At the beginning, her old
friend try to convince her by tell her about her successful carrier in owning a spa and her
wealth and ask her to join a entrepreneur courses. After joining a lot of classes, her friends
introduce her to a group of business partner group that force and manipulate her to invest
some money for the MLM business. First, they ask her to only give RM2500 as a starting
capital and then she ask her for another total money of RM30,000 from personal loan for
invest more and more.
Two weeks after the loan being accepted from 3 different banks, her friend and the group
members cheat her by giving an purchase item that totally more expensive than the real
value to sell. After being scams, she suffered from depression because cannot bear the total
of loan and she realize that all her business partner that lying is cannot be reach or contact
anymore. The case cannot be settled in the court since the company is already registered
under SSM and court held that she buy the item by her own willingness and no scamming.
Day by day, the debt increase to RM100k included some interest and dividend, She still
works in a company with RM1,000 salary to pay her own debt and its absolutely impossible
for her to pay back the debt. Now, she works only for paying back their debt and do another
part time job to bear the loan.
For this case, she might be recorded as blacklist since she made a loan above
RM30,000(Bankruptcy Act 1967) and have low credit rating for her to make another loan for
car, house and others. As she already made another part time job she needs at least
RM2000 of monthly salary and half of her salary (RM1000) are only to pay back her debt . In
10 years, she could pay back the total debt plus the interest and it might be tough since she
only left RM1000 for monthly use. She needs to control the expenses limit money for paying
bills, stop making a wasted money contract, such as astro, internet bills and others, buy food
from grocery rather than buying at restaurant, list down the monthly expenses, Buy things by
cash, rather than credit card, using public transportation or using motorcycle instead of car
that wasted money to pay petrol. Even though it is difficult, but it could help in settling down
the loan. Instead of monthly salary cutting, She also can make a saving in a year or a month
that could lowered the total of money and reduce the time of pay back the loan(lump sum).
When she get yearly salary bonus, use it to pay back the loan, try to sacrifice it to avoid the
highest dividend from the loan. The most important, try to avoid from makes another loan
from another banks, or any company that offer blacklist loan to pay back the debt because
it mostly to offer highest interest rate. Never believe to any others business scamming such
as MLM or skim cepat kaya or any other business that sound suspicious and dont have
any good background in making a business. Start Changing our daily life to become more
spent save rather than an extravagant spent.

Not to Forget to making an Investment, for example if she have RM1000 left for every month
saving, try to cut it half for invest to any others bank for example Tabung haji, CIMB Bank or
using gold investment but the best way is ASB, save at least 30% of the salary in the bank to
increase the total of money every month. Plus, She also can use the money to start another
part time job for business for example selling foods, or item that could give profit to her and
use it in investment. For example if she have RM1000, if she could buy the raw material to
that cost RM45 to sell it at office or home and get profit for example RM80, she can increase
the monthly saving, getting profit and invest it to investment bank and get another return. Cut
1/3 of the total profit every 3 month for paying back the loan.
Its good that she makes a loan at 3 different banks, put an authority to pay the loan to the
highest interest rate first, the higher the total, the higher the interest, make a proper
calculation to which bank that she need to pay more than the others. At least put a target
from which banks that she needed to be settled first. For Example, if she have RM1200 to
settle the debt every month, put RM800 to the loan bank that offer higher interest rate and
make a target to settle debt within 6 years than the other bank. It could ease the process for
making another business with the bank if we settled down their debt.
Another step, she can ask for guidance from AKPK or Department of Insolvency for further
help and counselling how to manage the debt. Other than that he can seek from others fund
for example like zakat (Al-Gharimin), Baitulmal, Tabung Dana Ehsan, and any other NGO
that can help people to settled down their debt.

Reference;
http://www.iiumc.com/gara-gara-mlm-siswazah-ini-muflis-di-usia-muda/