Banks Urged To Offer First-Time Homebuyers Greater Access To Financing

Pavither June 20, 2019

Banks urged to offer first-time homebuyers greater access to financing

Finance Minister Lim Guan Eng has called on banks to offer greater access to financing to first-time homebuyers and to small and medium enterprises (SMEs) to foster economic growth. 

According to The Star, the financial health of Malaysian households is slowly recovering with household debt as a ratio to gross domestic product (GDP) having fallen to 83 percent in 2018 from 83.8 percent in 2017.

“As a result, consumers have more room to borrow for wealth accumulation purposes, either for saving schemes, or for non-speculative investments including acquisition of long-term assets,” he said.

Read More: What You Need To Know About Down-Payments? 

Bank Negara Malaysia (BNM) statistics showed that household financial assets level is 2.1 times household debt, which means that households on average have more assets than debts, giving them the buffer against financial contingencies.

Moreover, the decision of BNM’s Monetary Policy Committee (MPC) to slash the overnight policy rate by 25 basis points from 3.25 percent to three percent effectively reduced borrowing cost.

“The Government has also requested BNM to remind all banks that business borrowers who are not facing loan defaults, but wish to improve their cashflow by restructuring and rescheduling (R&R) their loans for a longer tenure, should not have such R&R loans classified as non-performing loans,” Lim said.

Department of Statistics Malaysia revealed that retail sales climbed 6.3 percent to RM41.6 billion in April 2019, from RM39.1 billion over the same period last year.

“The overall wholesale and retail trade sales in April 2019 increased by 5.3 percent to RM105.1 billion from RM99.8 billion a year ago, indicating high consumer confidence,” said Lim.

“Together with strong industrial production expansion and a low unemployment rate, these suggest that the economy is expanding. Industrial production for April 2019 expanded 4.0 percent year-on-year, beating market consensus of 2.5 percent as compiled by Bloomberg.”


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