Govt to allow EPF savings as collateral for emergency loans: Anwar

KUALA LUMPUR – The government will allow retirement savings in the Employees Provident Fund (EPF) to be used as security for emergency loans for EPF members in dire financial straits, Prime Minister Datuk Seri Anwar Ibrahim said.

Anwar, who is also finance minister, announced this in the Dewan Rakyat this evening, also stressing that this is provided the contributors have enough savings in their EPF accounts.

He said this approach would be taken in response to repeated calls by several MPs urging the government to allow more EPF withdrawals for those in need of cash aid. 

“I welcome the suggestions made, but we must remember that EPF is meant as retirement savings,” he said when winding up the Budget 2023 at the policy stage here today. 

“We gave leeway during the Covid-19 pandemic, but other countries that did it have also stopped this. Instead, I propose another method to assist those who desperately need 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,” Anwar said.

Anwar, however, did not furnish further details on the initiative’s mechanism. 

Previously in his tabling of the Supply Bill 2023, Anwar had announced that the government would give a one-off RM500 injection to EPF members aged between 40 and 54 with savings of below RM10,000. 

During the debate on the budget, several lawmakers however pressed the government to allow targeted withdrawals for those in dire need of funds. 

They include former prime ministers Tan Sri Muhyiddin Yassin (Pagoh-PN) and Datuk Seri Ismail Sabri Yaakob (Bera-BN), as well as MCA president Datuk Seri Wee Ka Siong (Ayer Hitam-BN). 

Muhyiddin, who is Perikatan Nasional chairman, had said in his debate on Monday that the refusal to allow further withdrawals proved that the government was not serious about helping the rakyat face the high cost of living. 

The Pagoh MP also said the RM500 “top-up” would only benefit a small number of individuals, while noting that the larger majority preferred further withdrawals. – The Vibes, March 9, 2023