Avoiding a subprime crisis

THE recent announcement by the Urban Wellbeing, Housing and Local Government Ministry to enable property developers to obtain moneylending licences, and provide up to 100% financing for homebuyers has attracted many comments and debate. The minister, Tan Sri Noh Omar said the scheme is intended to assist Malaysians who have difficulties in securing a home loan.

In fact, the move is not new given that it has already existed under the Moneylenders Act 1951. Under the Act, the requirements for a moneylending licence are the same for any company, it only requires the approval of the Minister of Housing and the Registrar of Moneylenders. In our country, some property developers with the moneylending licence have already started to offer mortgage financing to their buyers, even prior to this announcement.