The deputy finance minister said their names will also be recorded in CCRIS and CTOS over the default, The Edge reported.

“However, in the event of a default, the banks cannot take the money from the borrowers’ EPF Account 2 until they reach 50 years old, because this facility is not a collateral,” he said.

As of April 12, a total of 59,230 contributors have applied for the programme since it opened on April 7, with only 27,705 found to be eligible.

FSA2 allows EPF members to obtain personal financing up to RM50,000 from banking institutions, but the applicants are required to have a minimum of RM3,000 in EPF Account 2.

So far, only two banks have confirmed their participation in the programme, namely Malaysia Building Society Berhad and Bank Simpanan Nasional.

The first phase of the programme is only for those aged 40 and above, while the second phase, which will be open to EPF contributors aged 40 and below, will be announced in the near future.

Ahmad added that members must continue to make their monthly repayment with an annual interest rate of 4.5%.