CJMY
Prime Minister Datuk Seri Anwar Ibrahim has announced a new policy in Malaysia that will allow those in dire financial straits to use their Employees Provident Fund (EPF) as collateral for bank loans.
Anwar delivered his winding-up speech as the Finance Minister in Parliament on March 9, stating that he would ensure that EPF contributors in dire straits can take up loans from a bank with collateral from their EPF.
He highlighted that Australia, Peru, and Chile implemented similar policies during the height of the Covid-19 pandemic. However, these countries have since stopped the policy.
Anwar stated that he disagreed with another round of EPF withdrawals. Still, he acknowledged the concerns raised by Members of Parliament throughout the two weeks of debates on Budget 2023 at the policy stage.
Datuk Seri Dr Wee Ka Siong, the Member of Parliament for Ayer Hitam, interjected and said that he agreed with Anwar, as there were Malaysians in desperate situations. Dr Wee highlighted that some Malaysians’ houses were nearly auctioned and said that the group required assistance.
However, Dr Wee was concerned about plans by Putrajaya to credit RM500 into the accounts of contributors with less than RM10,000. Dr Wee gave a hypothetical example of a lady who doesn’t make regular EPF contributions but is financially stable as a businesswoman. He suggested that the EPF could finetune the policy and RM500 given to those who need it.
In response, Anwar said he proposed EPF-guaranteed bank loans to those financially strapped. He introduced the collateral policy so Malaysians refrain from withdrawing from their EPF.
Last Friday, Anwar announced that two million EPF members aged between 40 and 54 with less than RM10,000 in their Account 1 would receive an RM500 contribution.
After Anwar delivered his winding-up speech, the members of the parliament passed the budget via a simple voice vote in the House.
Debates on Budget 2023 will continue at the committee stage for three weeks beginning next Monday, March 13.
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