Ministry mulls proposal for developers to act as money lenders

PETALING JAYA: The Urban Wellbeing, Housing and Local Government Ministry is mulling a proposal for housing developers to be issued a money lending licence to help non-bankable house buyers and overcome downpayment issues.

Minister Tan Sri Noh Omar said he observed many buyers were having difficulty making downpayments.

"I am thus proposing that eligible housing developers, especially those with deep pockets like Sunway Group, Eco World, Mah Sing and Glomac, be issued a money lending licence.

"It will be restricted to only providing end-financing to eligible house buyers who face difficulty in securing loans from banks," he said in his keynote address before launching the 19th National Housing and Property Summit in Petaling Jaya on Thursday.

He said the proposal is a win-win for both developers and house buyers.

"For the developers, this end-financing facility offers a second profit centre after the sale of the houses," he added.

Noh said another new initiative recently approved by the Government is the "Rent To Own", or R2O, for all eligible buyers of the People's Housing Project scheme.

"With the introduction of this new R20 initiative, I hope we'll be able to resolve the long outstanding problem of non-bankable house buyers, whose income may not meet strict bank requirements," he added.

Meanwhile, at a press conference, Noh said interested developers can start to submit applications for the money lending licence, under the Money Lender Act (Revised 2011) or Act 400 under the purview of the ministry.

He said with a money lending licence, developers can assist buyers for 100% or partial financing, while the interest rate should not exceed 18% a year. - Bernama
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