A state PKR leader has proposed for the government to arrange special loans to help civil servants facing difficulties in managing their personal loans from financial institutions.

PKR Johor chairperson Hassan Karim said the recipients can repay the loans via deductions to their future pensions or bonuses.

“This will facilitate their loan-taking without deductions to their monthly salary,” he said in a statement.

He was responding to Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Azih Muda, who had revealed to Bernama that 49,000 of its members are facing the risk of bankruptcy due to failure in managing loan arrears.

“To me, this situation is happening because they are facing financial difficulties to fulfill basic needs, in light of increasing costs of living, on top of the Goods and Services Tax (GST) implementation,” said Hassan.

Among others, Azih had noted civil servants were applying for personal loans with repayment amounts beyond their means.

“This situation is getting more serious as there have been civil servants who had forged their salary slips when applying for loans,” Azih was quoted as saying at a Labour Day seminar last Sunday.

In response, Hassan also proposed for the government to provide soft loans for civil servants to overcome short-term or long-term crises, which he attributed to the current stringent regulations on applications for housing and car loans.

“This is because the Khazanah Research Institute report had warned that Malaysia’s household debt, making up almost 90 percent of the country’s total gross national product, is at a worrying level,” he said.

At the same time, he echoed Azih’s call for the government to adopt the system being implemented by the Malaysian National Cooperative Movement (Angkasa), namely the credit reporting system (Spekar), which would be able to monitor civil servants’ loans via data on their salary deductions.

He added the government should also review the salary of civil servants to make it on par with that of workers in the private sector.