Malaysia’s financial sector still plays a major role in supporting home ownership, approving over 365,000 housing loans worth RM158 billion in 2019.
Of this, 53% were to first time house buyers and more than 100,000 accounts for the acquisition of affordable homes priced below RM300,000, said Bank Negara Malaysia (BNM) in its 2019 Annual Report.
In 2018, the central bank set up the RM1 billion Fund for Affordable Homes to complement funding by the industry.
In fact, the fund was fully utilised as at January this year, allowing over 4,700 households to purchase their first house in conjunction with the Home Ownership Campaign (HOC) of the government, reported New Straits Times.
“Following the full utilisation of the fund, first-time home buyers continue to have access to financing from the banking system, with seven out of every 10 housing loan applications approved by banks,” said BNM.
The central bank noted that acquiring a home was a major commitment for any household, oftentimes the single biggest investment for many.
As such, it makes sure that financial access initiatives were complemented by efforts promoting responsible borrowing.
“During the year, we worked with Agensi Kaunseling dan Pengurusan Kredit (AKPK) to roll out an online financial education module called Rumahku,” it said.
“The module has helped 40,000 individuals improve understanding on financial commitments related to home ownership and borrow within their means.”
BNM revealed that the module received positive feedback, with 90% of participants satisfied with its content.
The central bank also expanded the eligibility criteria for businesses looking for assistance under the Small Debt Resolution Scheme (SDRS) in October 2019. This allowed the scheme to assist terminated or dormant businesses with alternative sources of income to restructure their financial obligations.
“The goal is to avoid bankruptcy among SMEs and assist them in settling debt obligations prior to legal action,” explained BNM.
“Since its inception, the SDRS has facilitated the restructuring of over 1,190 business accounts, amounting to more than RM1.6 billion in financing.”