I have to wonder about those numbers. I've almost never heard anyone complaining about being rejected. One would expect some serious grumbling about the high rejection rate if they were turning down nearly a million applications and had a 96-97% ejection rate. I'd think that the agents would be in revolt if they were submitting 20 applications and only one got accepted!
Maybe they are using "inquiries" as their initial data point...and include people who don't do a follow up. But even that would seem high as they likely don't hear about the inquiries to agents, on website like this, and just hits on their website.
I'd like to point out that these reports by MM2H are basically "justifications". They give a lot of financials about how much the progam is bringing into the economy...but the economic benefits are not all equal. The purchase of property can be a pretty direct benefit, but the Fixed Deposit (while it helps currency market balance) will be recouped by the depositor at some point in time. Purchases of goods can be foreign imports vs. Malaysian produced items. Then there are vehicles- which vary in composition. Hiring a local or staying in a local Guest House percentage wise gets more into local pockets than staying in a foreign-owned hotel (of course, they do hire locals).
Making the program look like it is highly sought after, but selective, is good publicity.