Since 1997 until now, there are 2.1 million borrowers of PTPTN (National Higher Education Fund Corporation) who have taken a loan amounting RM47.8 billion. Up to 31 August 2014, PTPTN collected only RM5.36 billion and 174,000 borrowers have not made payment since 2010. To recover the outstanding loans, PTPTN have offered a rebate of 10% to those who pay 12 months continuous until 31 December 2015 and 20% discount to those who pay lump sum starting October 2014 until 31 March 2015. Would this incentive help to reduce the number of loan defaulters? Discuss.

Since 1997 until now, there are 2.1 million borrowers of PTPTN (National Higher Education Fund Corporation) who have taken a loan amounting RM47.8 billion. Up to 31 August 2014, PTPTN collected only RM5.36 billion and 174,000 borrowers have not made payment since 2010. To recover the outstanding loans, PTPTN have offered a rebate of 10% to those who pay 12 months continuous until 31 December 2015 and 20% discount to those who pay lump sum starting October 2014 until 31 March 2015. Would this incentive help to reduce the number of loan defaulters? Discuss.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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