KUALA LUMPUR: Putrajaya will introduce a new policy where those who are in dire financial straits will be able to use the funds in the Employees Provident Fund (EPF) as collateral for bank loans, says Prime Minister Datuk Seri Anwar Ibrahim.
"I will ensure that the EPF allows contributors who are in dire straits to take up loans from a bank with a collateral from their EPF, this is the best (I can do)," said Anwar while delivering his winding-up speech as the Finance Minister in Parliament on Thursday (March 9).
Anwar pointed out that Australia, Peru and Chile had similar policies during the height of the Covid-19 pandemic where it allowed those who were financially strapped to withdraw from their retirement funds.
"But, these countries have stopped (the policy)," added Anwar.
Anwar said he disagreed with another round of EPF withdrawals, but he took note of the concerns raised by MPs throughout the two weeks of debates on Budget 2023 at the policy stage.
Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) subsequently interjected and said he agreed with Anwar, as there were Malaysians who were in desperate situations.
"The houses of some Malaysians are even nearly auctioned. This is the group that requires assistance. You are spot on, this is the most important issue," added Dr Wee.
However, Dr Wee was concerned over plans by Putrajaya to credit RM500 into the accounts of contributors with less than RM10,000.
Dr Wee gave a hypothetical example of a lady who doesn’t make regular EPF contributions but is financially stable as she is a businesswoman.
"Maybe we can ask the EPF to fine-tune this policy and give it (RM500) to those who really need it," added Dr Wee.
In response, Anwar said that is why he proposed EPF-guaranteed bank loans to those who were financially strapped.
"We introduced the collateral policy so that Malaysians don’t withdraw from their EPF," said Anwar briefly.
Last Friday (Feb 24), Anwar announced that two million EPF members aged between 40 and 54 with less than RM10,000 in their Account 1 will receive a RM500 contribution.
After Anwar delivered his winding up speech, Budget 2023 was then passed via a simple voice vote in the House.
Debates on Budget 2023 will continue at the committee stage for three weeks beginning next Monday (March 13).
