THERE are no plans to increase the interest rate for community credit loan facilities or licensed moneylenders, which is among the lowest in the region, says the Local Government Development Ministry.
The interest rate for such loans, which is 12% for mortgage loans and 18% for non-mortgage loans, was among the lowest offered in the region, says minister Nga Kor Ming.
“Compare this to Hong Kong, which is between 24% and 60%.
“For the Philippines, there is no limit as it is based on the willing borrower, willing lender concept.
“For Singapore, it is 20%; Australia’s rate stands at 47%; and India is 21%.
“Our government has no intention to increase the interest for loans in order to protect the interests of 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.
Mohd Shahar had asked the ministry to state the measures to be taken to protect consumers, especially the youth who had taken the loans from the community credit facilities.
According to Nga, as of Jan 31 this year, there were a total of 4,817 active licence holders for licensed moneylenders across the country, of which 60% are bumiputra.
He added that when drafting the Consumer Credit Act, the government will take into account the financing of syariah-compliant provisions by the non-banking industry, including the community credit loan facilities in the country.
