First-time house buyers and small and medium enterprises (SMEs) should be given greater access to financing assistance to drive economic growth.
This is because the financial health of Malaysian households is slowly recovering, with household debt to gross domestic product ratio falling to 83 percent in 2018 from 83.8 percent in 2017, said Finance Minister Lim Guan Eng (photo, above).
“According to Bank Negara Malaysia’s statistics, the level of household financial assets is 2.1 times that of household debts, giving them the necessary buffer to face any financial contingencies.
“Consumers have more space to borrow for wealth accumulation purposes, either for saving schemes, or for non-speculative investments, including acquisition of long-term assets,” he said in a statement today.
However, Lim said the government was aware that lower income households were vulnerable to financial shocks, and required assistance to boost their financial strength.
He said the government provided assistance by improving its cash transfer programme, the Cost of Living Aid (BSH), introducing free public health insurance scheme, mySalam, and stabilising RON95 petrol and diesel retail prices.
“Additionally, Bank Negara's Monetary Policy Committee decision to cut its Overnight Policy Rate by 25 basis points to 3.0 percent from 3.25 percent has lowered the cost of borrowing, and the reduction has been transmitted by the banks to consumers.
“The government has also requested Bank Negara to remind all banks that business borrowers who are not in default but wish to improve their cash flow by restructuring and rescheduling their loans for a longer tenure should not have their loans classified as nonperforming loans,” he said.
Meanwhile, Lim said the government was determined to keep the prices of basic items in check and was concerned with the reported hikes in cement prices.
“The Ministry of Domestic Trade and Consumer Affairs has issued notices under the Price Control and Anti-Profiteering Act to 19 cement producers nationwide to get their explanation on the cause for the hikes.
“Furthermore, the government will play its role as an effective regulator to ensure that cement prices remain competitive and are not arbitrarily raised based on monopolistic factors,” he added.