KUALA LUMPUR (July 25): The Ministry of Plantation and Commodities will consider simplifying the loan process from banks to oil palm smallholders in the upcoming Budget 2025.

Minister Datuk Seri Johari Abdul Ghani said the government, via Budget 2024, had allocated RM100 million via a hybrid scheme in the form of a 50% grant and 50% loan to implement the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS 2.0).

He said his ministry recognises the difficulties oil palm smallholders face when applying for bank loans for replanting purposes, due to several conditions imposed by the banks.

“Although it is a 50% loan and 50% grant, we observed that it is quite difficult for some smallholders to secure financing, because they cannot meet many criteria.

“The ministry is looking into this, and will likely propose in the next budget how to simplify the 50% loan [portion] to facilitate smallholders with trees of over 25 years old,” he said during a question-and-answer session in the Senate on Thursday.

He was replying to a supplementary question from Senator Datuk Lim Pay Hen regarding incentives for oil palm replanting and responses to the TSPKS 2.0 initiative.

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