KUSKOP Drafting New Cooperatives Act To Modernise Sector
BUTTERWORTH, July 4 (Bernama) -- The Ministry of Entrepreneur and Cooperatives Development (KUSKOP) is drafting a new Cooperatives Act to replace the Cooperatives Act 1993 as part of efforts to modernise and reform the governance of Malaysia's cooperative movement.
Its minister, Steven Sim Chee Keong, said the proposed legislation would provide greater flexibility for eligible cooperatives to undertake investments without requiring prior approval from the Malaysia Cooperative Societies Commission (SKM), while retaining appropriate regulatory safeguards to protect members' interests.
"We are currently drafting a new Cooperatives Act to replace the Cooperatives Act 1993. The objective is to reform and revitalise the administration of cooperatives in Malaysia.
"For example, the new Act seeks to facilitate cooperative business operations and streamline investment criteria, conditions and approval processes," he told reporters after officiating the national-level National Cooperative Day 2026 celebration at PICCA @ Butterworth Arena today.
Also present was SKM chairman Lieutenant-General (Rtd) Datuk Ahmad Norihan Jalal.
Sim also announced two major reforms to the cooperative Ar-Rahnu sector, which will take effect this September, aimed at making Islamic pawn-broking services more transparent, competitive and customer-friendly.
Under the first reform, he said, the existing 2.5 per cent fee imposed on the pledged asset value will be abolished, while the profit rates for Ar-Rahnu services will be capped at one per cent per month for cooperative members and two per cent per month for non-members.
The second reform will allow cooperatives offering Ar-Rahnu services to dispose of unredeemed pledged items through a tender process, in addition to the existing public and electronic auction methods, he said, adding that the move is expected to enhance transparency, lower implementation costs, and provide greater operational flexibility.
“Whether through new legislation, lower costs, the abolition of fees or other improvements, these initiatives reflect KUSKOP's commitment to reducing bureaucracy and creating a more business-friendly environment for cooperatives," he said.
Meanwhile, Sim said the national cooperative sector continued to record strong growth, with business revenue rising by almost 20 per cent to RM82 billion in 2025, compared with RM68 billion the previous year.
He attributed the encouraging performance to the continued expansion of cooperatives nationwide, with 138 micro cooperatives upgrading to small cooperatives, 33 small cooperatives advancing to the large category, and 16 medium-sized cooperatives progressing into the large-cluster category.
The cooperative Ar-Rahnu sector also posted robust growth, recording a turnover of RM17 billion in 2025, accounting for 21 per cent of the cooperative sector's total revenue.
As of Dec 31, 2025, Malaysia had 16,468 registered cooperatives with nearly 7.3 million members.
"This means one in every four Malaysians is a cooperative member. The movement has accumulated RM18.6 billion in share capital and fees, while its total assets now stand at RM186.7 billion," he said.
To further strengthen the sector, Sim said the government has allocated RM254 million through SKM this year -- the largest allocation since the cooperative movement was established in 1922.
Of the total, he said, RM226 million has been channelled through the SKM Revolving Capital Fund (TMP-SKM), with 18 cooperatives receiving financing totalling nearly RM53 million to expand their business operations and strengthen their capabilities.
He said the allocation would support 28 programmes, including seven new initiatives focusing on digitalisation, technology adoption, sustainability compliance and green technology to enhance the competitiveness of Malaysian cooperatives.
Sim added that KUSKOP remains committed to strengthening the cooperative movement as a key driver of people's economic development, to increase the sector's annual revenue to more than RM100 billion by 2030 under the "Hebatkan Perniagaan Malaysia" (Elevate Malaysian Business) aspiration.
-- BERNAMA
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