PETALING JAYA: Some people who intend to apply for bank loans with their Employees Provident Fund (EPF) savings want to use it to service their other debts.
Shahrul Azromi Shahbudin, 43, an administrative executive, said that he would be among those applying in the first phase under the initiative to use savings in the EPF to apply for personal financing from banking institutions starting tomorrow.
“If it’s approved, I will be using the money to settle several other loans I made previously,” he said yesterday.
He said that while the initiative was a good move by the government, it failed to take into account some of the considerations faced by the B40 and the M40 income groups.
“After allowing the previous withdrawals such as i-Sinar and i-Lestari, some of them do not have much savings now,” he said.
Most of them are left with less than RM3,000 in their Account 2, and this is among the prerequisites to making the current withdrawal.
“Perhaps the government can look for other ways to help those with less than RM3,000 in their EPF Account 2,” he added.
The EPF said that before applying for personal loans, members must ensure their eligibility.
Under the scheme, members below the age of 55 can submit an advance notice for the withdrawal, provided that they have at least RM3,000 of savings in their Account 2.
The maximum financing amount has been fixed at RM50,000, subject to the member’s Account 2 balance, with a repayment period not exceeding 10 years.
The scheme will involve two phases, with the first beginning on April 7 and remaining open for one year, applicable for members aged 40 and above.
The starting date for Phase 2, for those below 40, will be announced in the future.
Factory worker Rosdi Zamberi, 44, said that he had no other option but to apply under the initiative to cope with the high cost of living and to service his other loans.
“I am just a factory worker and at the moment I cannot claim a lot of overtime.
“I have been working at the factory for more than 15 years and my salary is not that high.
“I need to apply for the loan so I can breathe better at the end of the month. I am thankful that the government introduced this initiative,” he said.
Nurul Khursiah, 37, a clerk from Sabah, said that she was keen to apply for loans under the initiative but she was not qualified under the existing eligibility set by EPF.“I want to settle all my other existing debts and just focus on one with EPF.
“But the age limit does not allow me to apply for it now,” she said.
Federation of Malaysian Consumers Associations (Fomca) chief executive officer Dr Saravanan Thambirajah said the group welcomed the move as there was a strong demand from the ground to withdraw money from the EPF, especially for those truly in need.
“After the Covid-19 pandemic, people are still struggling with the cost of living and they need financial support.
“We understand that there are some limitations to how the government can help and they are focusing more on self-reliance.
“However, the government at the same time must find ways to boost retirement planning for Malaysians.
“Looking at the current situation, they are not sufficient and the government needs to find ways to fill those gaps,” he added.
