Govt mulling scheme for EPF members to use savings as collateral for bank loans

The government is proposing a scheme which would allow Employees Provident Fund (EPF) contributors to apply for bank loans using their retirement funds as collateral.

Prime Minister Anwar Ibrahim however said this facility would only be for those in desperate need of money.

"In principle, I do not agree with allowing special withdrawals from the people’s retirement fund.

"However, I will ensure that EPF gives space to hard-pressed contributors with savings to borrow from banks, by using their EPF money as collateral for the loans," he said when winding up the debate on the Supply Bill 2023 in the Dewan Rakyat yesterday.

Anwar said this was the best way to help contributors in the present circumstances, as many countries which had given relaxations like withdrawals from retirement funds had cancelled such facilities.

Anwar also criticised opposition members who portrayed the government as oppressive in their debates.

He said grants and financial aid extended to states, including those administered by the opposition, had increased this year compared to previous years.

"Kelantan has been allocated RM351.5 million, Terengganu RM411.1 million, Perlis RM154 million. Then you compare with Sabah and Sarawak.

"It’s not fair to compare with Sabah, Sarawak because they came together to be with Malaysia later. Their rural areas are lagging far behind, much worse than poor areas.

"This is not a question of political interests. I am consistent in this matter. If we spend RM10 million, we have to add RM100 million in Sabah and Sarawak," said Anwar, who is also finance minister.

The government also provided development allocations totalling RM6.2 billion for Kedah, Kelantan, Terengganu and Perlis this year.

The Supply Bill 2023, the first budget tabled by Anwar’s administration, was then approved at the policy stage after a six-day debate from Feb 27 which saw winding-up sessions by every ministry.

On Feb 24, Anwar unveiled the country’s biggest ever budget of RM388.1 billion, with RM289.1 billion for operating expenditure and RM99 billion for development expenditure, including RM2 billion in contingency reserves.

According to the Dewan Rakyat calendar, the bill will be debated at the committee stage for 10 days beginning March 13.