PM: Govt to allow EPF funds used as collateral to take bank loans

PARLIAMENT | The government will allow Employees Provident Fund (EPF) members, who are in dire financial states, to use their retirement funds as collateral for emergency loans, without the need to withdraw their savings.

Prime Minister Anwar Ibrahim, who is also the finance minister, said this will be allowed if the contributors have enough savings in their EPF accounts.

“My principle is that the money in EPF is meant for retirement savings.

“During Covid-19, we gave the flexibility (for the people to make withdrawals). But now, other countries that offered the same flexibility have also stopped this.

“Instead, I propose another method to assist those who are desperately in need of cash.

“I will ensure that EPF will provide space to allow contributors with enough savings who are in dire straits to borrow from the bank, with their savings used as collateral. This is the best,” he said during his winding-up speech on the 2023 Supply Bill in Dewan Rakyat today.

Anwar said this approach comes after considering calls by several MPs, from both sides of the political divide, urging Putrajaya to allow withdrawals from the retirement fund.

Among the lawmakers who made the calls include former premiers Muhyiddin Yassin (PN– Pagoh) and Ismail Sabri Yaakob (BN – Bera) as well as MCA president Wee Ka Siong (BN – Ayer Hitam).

In re-tabling Budget 2023, Anwar announced the government would give a one-off RM500 allocation to EPF members, aged between 40 and 54, who have less than RM10,000 in their Account 1.

While commending the RM500 allocation, describing it as a “noble” effort, Ismail Sabri said those who are in dire need of money would only be able to enjoy the aid years later.

He stressed that the people, especially those badly affected by the floods, need immediate assistance.

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