`


THERE IS NO GOD EXCEPT ALLAH
read:
MALAYSIA Tanah Tumpah Darahku

LOVE MALAYSIA!!!


Sunday, July 7, 2013

Malaysia tightens household credit lendings

Malaysia tightens household credit lendings
Malaysia's central bank has imposed measures on household lending, including limits to loan tenures, which economists on Sunday said will reign in "excessive" consumer borrowing and curb property speculation.
Bank Negara Malaysia said it will now only allow personal loans of up to 10 years while financing for both residential and non-residential properties will have a maximum payback term of 35 years.
Previously, consumers were allowed to apply for personal and property loans of up to 25 years and 45 years respectively.
The central bank also announced a ban on "pre-approved personal financing products" -- unsolicited loan and credit card offers -- effective immediately.
Although a longer loan term may reduce monthly repayments, it encourages "excessive debt accumulation" and saddles consumers with heavier overall debt burden, the central bank said in a statement on Friday.
Yeah Kim Leng, group chief economist with financial firm RAM Holdings told AFP that the "mild credit tightening" is designed to curb household debt from rising excessively.
"Some consumers are borrowing to the hilt. The government wants to slowdown excessive borrowings and curb property speculation," he said.
Household debt has expanded rapidly over the last five years, increasing by 12 per cent a year, the central bank said.
Wan Suhaimi Saidi, economist with Kenanga Investment Bank, described the measures as positive for the economy because it would prevent a "possible bubble burst" in the household debt if consumers continue to enjoy easy borrowings.
The central bank, however, said households who have the financial capacity to take on borrowings will continue to enjoy access to financing.
Yeah ruled out possible interest rate hike as this painful move will hurt growth in the export dependent country amid the weak global economy.
Malaysia's economy is expected to grow five to six per cent this year powered by strong domestic demand.
- AFP

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.