Malaysia’s HOUSEHOLD DEBT-to-GDP now stands at 82.9 % (2013) , and is ONE OF THE HIGHEST IN THE REGION. themalaymailonline/malaysia/article/civil-servants-want-pm-to-step-in-over-bnm-loan-curbs In 2010, the HOUSEHOLD DEBT-to-GDP ratio was 75.8 per cent In 2011, the ratio was 76.6 per cent In 2012, the ration was 80.5 per cent Late last month ( August 2013) , NEGARA MALAYSIA (BNM) announced that Malaysia’s household debt-to-GDP ratio jumped by 3.3 per cent in the second quarter of the year, up from 82.9 per cent in the first quarter. The comparative ease of obtaining personal loans has increased the percentage of personal financing over household debt from 16 per cent in 2011 to 17 per cent last year. In July, BANK NEGARA MALAYSIA (BNM) had introduced three new measures to curb Malaysia’s rising household debt which included reducing the maximum tenure for personal loans to 10 years from 25, and 35 years for house loans. And offers for pre-approved personal loans have also been prohibited. BNM reported in March that 80 per cent of personal loans from NBFIs (non-banking financial institutions) which are NOT supervised by BNM goes to GOVERNMENT EMPLOYEES with household incomes of LESS than RM3,000 a month. The NBFIs include, among others, Bank Rakyat Sdn Bhd and Malaysia Building Society Bhd (MBSB), and development financial institutions (DFIs) such as Agrobank, SME Bank and Lembaga Tabung Haji. Civil service representatives today sought Prime Minister Datuk Seri Najib Razak’s intervention TO UNDO Bank Negara Malaysia’s “drastic” move to shorten loan periods beginning July. Representatives from the National Cooperative Force Malaysia Berhad (ANGKASA) and the Congress of Unions of Employees in the Public and Civil Services (CUEPACS) wanted the repayment period for personal loans to be EXTENDED TO 15 YEARS from 10. ANGKASA president Datuk Abdul Fattah Abdullah told reporters after the meeting wiht the Prime Minister: “It would be a gift to the civil service and those with low wages.fWe support the government’s efforts to reduce household debt, but we suggest it shouldn’t have been done drastically and caused a major burden to lenders.” Abdul Fattah said Malaysia’s household debt-to-gross domestic product (GDP) ratio is still “NOT TROUBLING ” compared to Singapore and the US. The groups said they expected a decision to be announced either before or during Budget 2014 announcement in October. In recent months, economists stressed the need for STRICTER SUPERVISION on NBFIs that issue PERSONAL LOANS PRIMARILY TO CIVIL SERVANTS, voicing concern about the vulnerability of low-income households to economic shocks. But BNM Governor Tan Sri Dr Zeti Akhtar Aziz insisted that non-performing loans currently represent only two per cent in Malaysia’s household sector, while the majority of home loan borrowers are largely considered creditworthy. Zeti had ealier insisted that measures have already been put in place to promote sound and sustainable borrowings.
Posted on: Wed, 11 Sep 2013 14:13:43 +0000
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