The cabinet has asked Urban Wellbeing, Housing and Local Government Minister Noh Omar to study further his proposal to allow property developers to provide housing loans.

Noh in a statement said the cabinet had asked him to refine three matters, namely: the policy's effectiveness in helping the public finance housing purchases; an interest rate and repayment period that won't burden the public; and clear guidelines that is easily understood by companies that have money lending licenses and borrowers alike.

He added that his ministry will take proactive measures to ensure that money lending facilities under the Moneylenders Act are not abused by license holders.

Speaking to Malaysiakini, Tourism and Culture Minister Nazri Aziz said Noh had explained his intentions to make it easier for people to obtain loans and to address the slump in the housing market.

"(Noh) thought that is something that he can do to help people (who can't secure housing loans).

"Finance Minister II Johari Abdul Ghani then explained from the point of view of the law and how it will be difficult with Bank Negara.

"Both have got a strong case so we decided to have further discussions on this," Nazri said when contacted.

Noh had been asked to explain to the cabinet his housing loan proposal, which had courted flak from the public.

Last Thursday, Noh had said that his ministry is mulling a proposal for housing developers to be issued a moneylending licence to help non-bankable house buyers and overcome downpayment issues.

He had said the interest rate of the loan would be capped at 12 percent with collateral or up to 18 percent without collateral.

Critics however said the problem was not that people could not obtain loans, but that affordable housing was not affordable.

Meanwhile Johari pointed out that if home buyers couldn't obtain loans from bank 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 impose interest of up to 18 percent.