The Malaysian Insight

BANKS should provide financing to first-time housebuyers and small-medium enterprises as the financial health of Malaysian households continues to improve, Finance Minister Lim Guan Eng said today.

He said the financial health of households in the country is on the mend as the share of household debt in gross domestic product has dropped to 83% in 2018 from 83.8% in 2013.  

“Based on this development, consumers have more room to do borrowing for the purpose of accumulating wealth, whether through saving schemes, speculative investments and ownership of long-term assets.

“Banks should give access to more financing widely to first-time housebuyers and SMEs to drive the economy,” he said in a statement.  

Bank Negara Malaysia data show that the level of household financial assets is 2.1 times household debt, showing that households had more assets than debts, said Lim, adding that this can provide households a buffer for contingencies.  

“However, the government knows how easy it is the livelihood of the low-income earners can be affected when unexpected financial emergencies arises and the need to strengthen their finances.

“For this, the government had successfully improved the living cost cash aid programme, mySalam free insurance scheme and stabilising the price of RON95 and diesel,” he said.

Lim said the stabilisation of fuel prices had managed to reduce the cost of living, especially for the Bottom 40 group.

Inflation in April is stable at 0.2% due to stable retail prices for RON95 and diesel, he said.

“The government is also determined to ensure basic goods are controlled in view of the rising cement prices in the market,” he said.

On the rising cement prices, Lim said the Domestic Trade and Consumer Affairs Ministry under minister Saifuddin Nasution had issued 19 notices under the Price Control and Anti-profiteering Act to 19 cement producers nationwide to get their explanation.  

He said the government will continue to play its role to monitor the situation to ensure the prices of cement remain competitive and from monopoly influences. 

Lim said the monetary policy committee on May 7 this year had decided to slash the overnight policy rate by 25 percentage points to 3.00% from 3.25% to reduce the cost of borrowing.

He said Putrajaya also told Bank Negara to remind all banks not to classify loans to operators who do not have problems servicing their loan but want to reschedule their loan repayment to improve their own cash flow as non-performing loans. – June 19, 2019.