The Rise of Hypermarket Financing

Introduction
In year 2020, all states
except Kuala Lumpur
have collapsed as a
result of zombie
outbreak started in
Johor and rapidly
spread through the
whole Malaysia.
Tragically, domestic
capital is not readily
forthcoming as Central
Bank of Malaysia has
also ceased to function
effectively. As the profitoriented institutions,
banking institutions will
cater primarily to
financing large
corporates and supranational reconstruction I.
schemes. Indeed,
conventional banking
will cease to exist and
replace by
unconventional forms
of banking.
Roles of Hypermarket
Financing
Under the situation
where banks will only
provide financing
services to large
corporates, it has
causing difficulty for
farmers, producers,
suppliers as well as
SMEs getting access to
cash. In order to
ensure supply of basic
necessities,

hypermarket
lenders will
determine whether
the cash loan
amount suits the
customer based on
their requirements,
availability of other
resources and also
financial capacity to
repay the loan.
Customers are
required to pay back
the cash loan
together with the
interest charged at
the end of the term.

an unconventional form
of banking has
emerged where
hypermarkets have
emerged as centres of
commerce.
Hypermarkets like
Giant will offer
financing to SMEs,
farmers and
entrepreneurs that are
Involved in the supply
of essential foods and
services. Hence,
hypermarkets play an
important role in
generating the liquidity
in the market.
II. Product Loan / Raw
Material Loan
Types of Financing
Raw materials such
In particular, the types
as seed, fertiliser
of financing services
and building
are as follow:
materials will
Cash Loan
provide by
Cash loans are
hypermarket
generally a loan
financing service
option that typically
providers to farmers
involves borrowing
and producers
a sum of money
based on their
from the
needs. In return,
hypermarket
they are expected to
lenders in order to
supply a certain
conduct the small
portion of their
scale economic
crops and products
activities. To apply a
to the hypermarket
cash loan, small
lenders based on
entrepreneurs and
the terms that have
farmers need to
been agreed earlier.
specify the amount
of money that they
would like to borrow,

Small entrepreneurs
and farmers will
receive advance
payment before
crops and products
are being supplied I.
to the
hypermarkets. This
form of hypermarket
financing ensures
small entrepreneurs
and farmers will
have sufficient
capital to start up
their economic
activities.

Types of Emerging
Risks
Three emerging risks
that might incur in the
industry are as follow:
Monopoly Risk
There is the
possibility that a
particular
hypermarket might
plan to monopoly
the whole
hypermarket
financing industry to
ensure it will be the
sole hypermarket
lender and goods
supplier to
maximize the profit.

IV. Leasing
Hypermarkets will
lease their lands for
II. Credit Risk
plantation or
Cash loans are
agriculture activities
usually unsecured
in exchange for the
where producers
supply of essential
and suppliers might
foods based on the
default their debt
agreeable terms
obligations. Crop
that have been set
failure on top of
earlier.
misused the money
that are supposed
to repay the loan
are the possible
factors that might
lead to the
occurrence of
default risk.

III. Cash Advance

Payment

III. Fraud Risk

In the wake of
economic meltdown
along with difficulty
getting access to
cash, fraudulent

application of
hypermarket
financing will be
increased
significantly. Fraud
risk can be very
disruptive where the
hypermarket
lenders might lose a
significant amount
of money and at
an extreme level, it
can even lead to the
collapse of a
particular
hypermarket
financing service
provider.
Conclusion
During the critical time
where the country is
facing zombie
apocalypse and the
traditional forms of
banking system has
ceased to function
effectively, the emerge
of unconventional
forms of banking is vital
in ensuring small
entrepreneurs and
farmers will have
access to financing
services. The potential
risks that can be
foreseen in the future
need to be addressed
carefully so that
hypermarket financing
can serve its primary
roles.