Allowing EPF withdrawals not the only way to ease public burden, says Anwar

KUALA LUMPUR: Measures using Employees' Provident Fund (EPF) savings are not the only means the government is exploring to ease the public’s financial burden, says Prime Minister Datuk Seri Anwar Ibrahim.

“We are finding other ways to help. For example, there is a difference between worker categories, such as farmers and fishermen, in which we are helping differently to alleviate their burden,” said Anwar.

He added that this includes aid for civil servants.

“It should not be assumed that the EPF is the only way to ease the public’s burden,” he said during Prime Minister's Question Time in the Dewan Rakyat on Tuesday (March 21).

He was responding to a supplementary question by Hassan Abdul Karim (PH-Pasir Gudang) on the public’s feedback towards the introduction of a new policy where those who are in dire financial straits will be able to use their EPF savings as collateral,

On the interest rate for this proposal, Anwar said Islamic banking instruments would be used, with a minimal service cost charged.

“We will also not stop EPF members (regardless if they are Muslim or non-Muslim) who choose to take the loans through conventional means.

"EPF, however, recommends members use Islamic-based loans due to the lower interest rates,” he said.

Anwar also acknowledged EPF members' concerns on why they could not use their own savings, adding that the money should only be used when they were older.

“The EPF was not set up as a loan scheme but instead as retirement funds,” he said.

He said using EPF savings as collateral also did not breach Section 51 of the EPF Act.

Anwar added that an estimated 6.7 million EPF members had less than RM10,000 in their accounts.

“The majority are Malays with a median of RM4,937 remaining in their EPF accounts,” he said.

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