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Over 4 million Employees’ Provident Fund (EPF) contributors will be eligible for loans between RM3,000 and RM50,000 from banking institutions, using their Account 2 balance as support.
During the parliamentary session yesterday (March 29), Prime Minister Datuk Seri Anwar Ibrahim pointed out that the purpose of this was to facilitate better Syariah compliant facilities by banking institutes which do not give way for any sort of usury.
He also added that the conventional interest rate or the Islamic profit rate which will be charged by the banking institutes will be between 4% and 5% annually.
These rates, he said, are far lower from the market interest rates which stand between 8% and 15%.
Hence, through this initiative, eligible contributors can take out loans starting from RM3,000 up to a maximum of RM50,000.
Anwar also added that all financing of this loan is subject to the criteria of the contributor’s savings balance in Account 2 of their EPF.
As reported by the Malaysian Gazette, Anwar said:
Even in the current situation, if withdrawals are allowed, the people’s savings have shrunk dramatically. Is it fair for us to burden people’s old age with insufficient savings? Is there no other way that can be worked out?
Prime Minister Datuk Seri Anwar Ibrahim
As of 31 January, a total of 1.89 million members between the ages of 40 and under 55 were recorded to have savings in Account 1 of RM10,000 and below.
On 9 March, Anwar, who is also the finance minister, announced that the government is deliberating to greenlight the use of EPF savings as collateral for emergency loans, following repeated calls from the Opposition to allow further withdrawals.
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