KUALA LUMPUR: Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar has objected to the suggestion that allowing property developers to offer home financing loans will turn them into 'Ah Longs' (loan sharks).
Noh said the policy has actually been in existence for some time and that 54 housing developers have licenses to provide loans as a “bridge” to cover the down payment for property purchases.
He said the policy has allowed the government to assist home buyers to secure financing under the Moneylenders Act 1951 (Amendment) 2011 (Act 400).
In September, Noh announced that eligible housing developers can obtain licences to provide financing of up to 100 per cent, to be issued by the ministry under the Act.
The announcement was met with criticism, including worries that it will encourage unregulated lending to households with weak financial profiles, and undermine the strength of the financial system if not implemented prudently.
Noh said he had brought the matter up to Cabinet, and it was decided that his ministry will review and improve home financing under the Act, including in terms of interest rates and repayment period, so that it would not burden the people.
"The ministry will take proactive measures and look comprehensively into the effectiveness of loan facilities under the Act.
“These include coming up with guidelines which are clear and easy to understand by both housing developers giving the loans, and borrowers.
“We want to ensure that the mechanism will not be misused by irresponsible licence holders,” he said during the Minister's Question Time (MQT) in Parliament today.
The Tanjung Karang MP was replying to Datuk Dr Makin @ Marcus Mojigoh (BN-Putatan), who asked him to state the purpose and intention of the government in allowing property developers to lend money for home purchases.
Noh added that under the Moneylenders Act 1951 (Act 400) and the Housing Development (Control and Licensing) Act 1966 (Act 118), housing developers are required to submit financial reports to the ministry.
To a supplementary question from Dr Makin, Noh said the Moneylenders Act 1951 is not applicable in Sabah, Sarawak and Labuan.
He said it would be up to the respective states to decide on allowing property developers to offer loans to house buyers.
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