KUALA LUMPUR: There are no plans to increase the interest rate for credit community loan facilities or for loans from licensed money lenders, the Dewan Rakyat was told.
Local Government Development Minister Nga Kor Ming.said the interest rates for such loans – 12% for mortgage loans while 18% for non-mortgage loans – were among the lowest offered in the region.
"If we compare with Hong Kong, it stands between 24% and 60% there.
"For the Philippines, there is no limit, as it is based on a 'willing borrower, willing lender' concept.
"While in Singapore, it is 20%, Australia 47%, and India 21%.
"Our government has no intention to increase the interest rate in order to protect consumers as well as licensed business operators," he said in reply to a supplementary question from Datuk Mohd Shahar Abdullah (BN-Paya Besar) during Question Time on Monday (Feb 27).
Mohd Shahar had asked the ministry to state the measures taken to protect consumers, especially the youth, who had taken loans.
According to Nga, as of Jan 31, there were a total of 4,817 active licensed money lenders across the country, 60% of whom are bumiputera.
He added that in drafting the Consumer Credit Act, the government will take into account the financing of syariah-compliant provisions by the non-banking industry, including credit loan facilities in the country.
Nga said that enactment of the legislation, which is led by the Finance Ministry and the Securities Commission, will be among the government's top efforts to protect consumers.
"The ministry is in the process of drafting the Act, which will take into account syariah-compliant financing and Islamic pawning by the non-banking industry," he said.
