Govt wants ministry to improve home financing policy

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PUTRAJAYA: The Cabinet today instructed the urban wellbeing, housing and local government ministry to review and improve the home financing policy stated under the Moneylenders Act 1951 for house purchases.

Minister Noh Omar said matters concerning the effectiveness of the policy in helping the people secure loans for house purchases were discussed and concluded after he explained his housing developer loan facility proposal to Cabinet members during their meeting today.

This is because the policy already exists and several companies have been given money-lending licences to give out bridging loans as deposits for house purchases, he said in a statement today.

Noh said the Cabinet also called for a review and improvement of the policy, in terms of interest rates and repayment period.

This was to ensure the loans would not burden the people, besides having clear guidelines that could be easily understood by both licensed moneylenders and borrowers.

“At the same time, the ministry will also take proactive measures and look comprehensively into the effectiveness of loan facilities under the Moneylenders Act 1951 (Amendment) 2011 (Act 400) to ensure that it was not being misused by irresponsible licence holders.”

Last week, Noh proposed an initiative to allow housing developers to offer home loans as there was a provision under the Moneylenders Act 1951 to help house buyers who faced difficulty in securing full bank loans.

Noh said the proposal, however, received mixed reaction from various quarters, as well as speculation on the details of the proposed scheme.

“I would like to clarify that the proposal involves a financing scheme, as stated under the Moneylenders Act 1951 (Amendment) 2011 (Act 400), which is under the jurisdiction of my ministry.”