KUALA LUMPUR – The Employees’ Provident Fund (EPF) can use the contribution money in the agency as collateral to banks to convince them to help subscribers facing financial problems including debts, said an economic expert.
According to the expert concerned, it is one of the alternatives that can be taken by EPF, apart from allowing the subscribers to withdraw their contributions, as implemented by the government before.
An economist at University College i-CATS Kuching, Prof Datuk Shazali Abu Mansor said for that purpose, the government would need to discuss with the banks.
“If the government can instruct the banks to help those with debt problems, it would be better because the strict regulations of some banks are making it difficult for the people, and the banks should know that the cause of the problem is due to the Covid-19 pandemic and not the people.
“By making EPF savings as collateral, it will help the subscribers, who can also use the collateral period as a time for them to rebuild their finances,” he said when contacted today.
He said that the government through Bank Negara Malaysia should also give priority to looking after the welfare of borrowers and not just the interests of banks.
“Where the rules can be relaxed, it should be relaxed, such as allowing customers who are in the Central Credit Reference Information System or blacklisted to make loan structuring or flexible repayment based on their financial ability. This is the problem facing most entrepreneurs,” he said.
Sharing Shazali’s thoughts is a senior lecturer at the department of finance, school of economic studies, Universiti Utara Malaysia, Adilah Azhari.
She said EPF could also reduce the contribution rate so that subscribers had more money to use to pay debts and for other basic needs.
“The proposed reduction in contribution cuts can be carried out in a few months, for example for 12 months and this will give the people room to solve their financial problems because the contribution is mandatory.
“For example, for those with an accumulated contribution of less than RM10,000, it may be possible to reduce their contribution rate to as low as 4.5%, while those with more than RM10,000 to 8%,” she said.
Meanwhile, an economic analyst at the UniKL business school, Assoc Prof Aimi Zulhazmi Abdul Rashid said that if EPF withdrawals were to be allowed again, they should be directly credited to the bank to settle outstanding debts or adjust loan payments to avoid bankruptcy.
“It can also be made through the Credit Counseling and Management Agency (AKPK), specifically to those with bank debt… if it can be done, will give a new lease of life to those affected,” she said.
Another economic analyst, Putra Business School’s master of business administration programme director, Assoc Prof Ahmed Razman Abdul Latiff, advised the public to continue to spend within their means and not incur new debt.
“Always improve your skills and knowledge to be able to get a job that promises a higher salary, and if you need help, don’t hesitate to get help from those who can help.
“Those with problems can also get the services of AKPK to help with their financial management and participate in upskilling and reskilling programmes to improve their quality of life,” he said. – Bernama, January 19, 2023
