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Pakatan tells EPF to snub RM1.5b loan scheme

February 8, 2012
By Melissa Chi (TMI)
February 08, 2012

KUALA LUMPUR, Feb 8 — Several Pakatan Rakyat lawmakers today urged the Employees Provident Fund’s (EPF) directors and investors to reject a scheme to lend RM1.5 billion to house buyers with weak credit backgrounds.

“Pakatan Rakyat leaders think that it is wrong, cruel and immoral to gamble and expose … hard-earned workers’ savings to an agency with such a poor credit level,” according to the memorandum that the pact’s representatives handed to the EPF deputy chief executive officer Datuk Shahril Ridza Ridzuan today.

PR lawmakers have spearheaded public resistance towards the ruling Barisan Nasional (BN) government’s plan to help some 20,000 individuals buy the homes they are now renting from Kuala Lumpur City Hall (DBKL), with loans using EPF funds.

According to Prime Minister Datuk Seri Najib Razak previously, the scheme was designed to help the lower-income group who failed to obtain loans from financial institutions to own houses.

This led to accusations by PR that the government was encouraging “subprime” lending.

“These loans will be given directly to the government and the government needs to provide 2.67 times [the borrowed amount as] security [for] the loans. So the government needs to give a big amount of loans,” DAP publicity chief Tony Pua told reporters here today.

Raja Nong Chik predicted that no more than “10 per cent” of borrowers would default.

He added that Shahril explained that the total loan will not reach the RM1.5 billion figure announced by Minister of Federal Territories and Urban Well-being Raja Datuk Nong Chik Raja Zainal Abidin, but revealed that the first batch of loans would be worth some RM300 million.

“At least we got an explanation and a reassurance from EPF that they will use tight terms and conditions so that the workers’ savings will be protected,” Pua said.

PAS MP Dr Dzulkefly Ahmad, one of the lawmakers present, said the names of the nine banks as well as the reasons why they pulled out from the loan scheme should be made public.

Lembah Pantai MP and PKR vice-president Nurul Izzah Anwar said Shahril explained today that EPF will provide loans to the government, which will then disburse them through a financial institution, and not the Federal Territory Foundation.

Raja Nong Chik previously said the loan would be secure as it is guaranteed by DBKL, a government agency, and that EPF would earn 5.5 per cent interest per annum from the repayments made by the 20,000 new house buyers.

The Umno senator also said he expects “not more than 10 per cent (of the borrowers) will default”.

The government was forced last week to address fears that the housing loan scheme would result in losses for the 5.7 million active EPF contributors.

Under the scheme, applicants will receive a 100 per cent loan, with a repayment period of up to 25 years to allow borrowers to make “smaller” monthly repayments.

Financial institution must manage loans for unqualified buyers, says EPF (TMI)

EPF housing loan ‘comes with 2.67 times guarantee’ ( S Pathmawathy – MKini)

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2 Comments leave one →
  1. February 8, 2012 10:08 am

    The EPF money belongs to the people of Malaysia so are the government’s money, the money does not belong to the government, therefore it does not sound right that the people is giving guarantee to themselves. Can one guarantee himself when he is applying for a loan from a bank ?
    It is because of this the deceitful and corrupted Umno scumbags and parasites are instructing their EPF lackey directors, obviously appointed by them, to approve the loans.These so called ‘Directors’ do not have any choice but to grant the loans if they wish to stay on the board of directors ! Have you ever asked why the banks were not approached for the loans, when their main business is to loan money ? Or have the banks run out of confidence in the government ?
    In reality the scumbags and parasites in Umno have run out of places to go to for the loans and in desperation are turning to the organization where there is money and above all the EPF directors must listen, without question, to the parasites and scumbags of Umno if they wish to remain as EPF directors.

  2. Black Arrow permalink
    February 8, 2012 10:19 am

    That is why the EPF can be referred to as the BN Govt’s Eternal Plundering Fund or Eternal Pilferage Fund. The BN Govt is nothing but a bunch of crooks out to dupe the rakyat.

    Our hard-earned savings for old age are at great risk. Vote Pakatan Rakyat. The time has come to boot out BN before it is too late. Perhaps that is why Najib is delaying the polls.

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