KINIBIZ Tiger was very sympathetic to the plight of the middle class and their search for shelter. This time around, Tiger will be sympathising with those who earn RM3,000 or less and work for the government. Tiger is a real social activist, a bleeding heart. Just call Tiger Mother Tigresa.

Soon Tiger will be feeding those under the poverty line with the carcasses of deer and Tiger’s enemies merely to ensure their continued well-being!

But Tiger digresses (my how that word looks like tigresses). Tiger would like to draw your attention to Bank Negara’s regulations to dampen household debt, specifically the one that deals with lowering the tenures for personal loans from 25 years to 10 years.

The non-bank financial institutions (NBFIs), or shadow banks, were less than happy with this ruling. Angkasa, the umbrella bodies for cooperatives which enable deductions from the salary for government servants, came out to say they would lose money. Malaysia Building Society Bhd (MBSB) shares went down after the announcement.

But Tiger saves the best for last: Koperasi Jess Johor complains that the new regulations will force them to include “loans from other sources which are not in the payslip such as housing and car loans as well as credit card” when calculating the 60 percent debt-to-income ratio to determine loan limits.

This would make “most of the members unqualified even for a small loan from us now”.

Tiger would hope so! If the entirety of one’s debt when including credit cards and private loans exceeds 60 percent, then has one any business getting loans that would take up to 25 years to pay off?

What is one supposed to do about living expenses? Perhaps Tiger can live on fresh air and sunshine and the occasional large herbivore kill, but humans need money. And savings. And retirement money.

This revelation is rather shocking to Tiger, as Bank Negara Malaysia had introduced guidelines early last year that would require the debt service ratio to include all debt obligations. Yes, BNM at that time had no jurisdiction over cooperatives or NBFIs, but the Cooperatives Commission was supposed to impose similar requirements on the organisations under them.

Tiger can’t help but observe that this only gives truth to the prevailing opinion that NBFIs are ‘reckless lenders’.

Go to KiniBiz for more .

This article was written by Samantha Joseph

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