CIMB bank chairperson Nazir Razak has lauded Finance Minister II Johari Abdul Ghani for speaking out against what he described as a "dangerous idea".
Nazir, who is also Prime Minister Najib Abdul Razak's brother, said this in reference to Urban Well-being, Housing and Local Government Noh Omar's proposal to allow property developers to become moneylenders.
"Well done finance minister II for speaking out quickly and firmly against a dangerous idea.
"More unregulated lenders and subprime borrowers will compound the risk of a debt crisis," he said in an Instagram posting today.
Nazir said the focus should instead be on increasing the number of affordable housing and related measures.
"The focus should be on making sure that those who can afford it can access loans at fair prices from banks, giving borrowing subsidies for the most needy and availing more affordable housing."
On Thursday, Noh said developers can apply for moneylending licences to provide loans to home buyers who wish to buy their properties.
Noh said the measure was intended to provide an alternative to home buyers who could not get approval for bank loans.
He had said the interest rate of the loan would be capped at 12 percent with collateral or up to 18 percent without collateral.
Johari had pointed out that if home buyers couldn’t obtain loans from banks at an interest rate of between four to six percent, it was not logical to expect them to be able to cope with a loan that imposed interest of up to 18 percent.
He had also pointed out that developers had limited funds whereby they need to take out bank loans to finance their developments, and therefore questioned their capability in also providing loans to home buyers.
