The government will implement a technique that will allow Employees' Provident Fund (EPF) contributors to use their contributions to the agency as collateral to banks for financial borrowing purposes.
According to The Malaysian Insight, Datuk Seri Anwar Ibrahim, the Prime Minister, stated that the option might be available to any EPF contributor who is 'desperate' to receive a financial loan with collateral from the agency concerned.
"My principle is that EPF money is for old age savings and we give flexibility in the era of COVID-19, even countries who grant the same freedom have already canceled that way.
However, Prime Minister Anwar Ibrahim stated that this strategy is exclusively for individuals who are truly desperate and in need of money.
"In general, I oppose the special release of the people's retirement savings fund. But, I will ensure that the EPF allows contributors who have money and are in a difficult situation to borrow from the bank with security or collateral from the EPF money," he said at the Supply Bill 2023 debate concluded in the Dewan Rakyat.
“I continue to listen to the views, therefore I propose to adopt a technique to make it simpler for desperate people so that the EPF allows contributors who have money to make bank loans with collateral from the agency," he stated during the Budget 2023 proposal's closing session, here.
Anwar, who is also the Minister of Finance, stated that the EPF approach of allowing contributors with money who are in a difficult condition to borrow from a bank with the guarantee of bank collateral is the best solution.
According to Anwar, people who are proposing to be able to make withdrawals are solely concerned with those who have money in their EPF.
"I propose that those who have the opportunity, there is a person who appealed to the EPF, claiming that he has RM1 million (in the EPF) but is unable to withdraw it.
"He had to settle his business debt of roughly RM180,000 to RM200,000, depending on the circumstances.
"That's why I stated, we don't hesitate to make collateral; he didn't 'withdraw' from the EPF, but EPF made the collateral as collateral," he explained.
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