Touch 'n Go: Our interest rates comparable to other personal loans

 

Touch 'n Go Group has said that the interest rate for GOpinjam, is comparable to other personal loan rates in the country.

"The interest rate for the digital personal loan ranges from eight percent and up to a maximum of 36 percent. We expect the average rate across our portfolio of borrowers to be comparable to other personal loan rates."

"The interest rates will depend on the individual borrowers’ credit profile, loan amount and tenure, among others. Unlike most providers, we will not charge any stamp duty fees or processing fees," Touch 'n Group said in a statement to Malaysiakini.

The group expects the loan approval numbers to be modest to ensure that loans can be affordably serviced by the users.

Launched on April 1, the micro-lending service is jointly developed by CIMB Bank Berhad and financed under the bank's personal loan service, e-Zi Tunai, which offers a similar fixed interest rate.

GOpinjam offers personal loans from as low as RM100 to a maximum amount of RM10,000. The repayment period for these loans can range from one week to one year, with no hidden fees for early settlement charges.

To further promote inclusion and accessibility to as many people as possible, potential borrowers will require a minimum monthly income of only RM800 to gain access to GOpinjam.

Loans available at local banks

A check on the loans available in local banks showed that they provide an interest or profit rate that starts between five percent and eight percent, depending on the tenure and loan amount. Some banks even cap the maximum interest rate at 15 percent.

Former prime minister and finance minister Najib Abdul Razak has questioned the fixed interest rate of up to 36 percent.

The Federation of Malaysian Consumers Associations (Fomca) fears that the microlending service, which is available to the 16 million Touch 'n Go registered users, lacks safeguards while the Consumers Association of Penang (CAP) said the microlending service promotes a debt dependency culture to Malaysians by ‘living tomorrow today’.

A netizen said he was entitled to a loan amount of RM3,600 with his monthly salary of RM1,200 in less than one minute via the GOpinjam feature.

TnG Go Pinjam is such dangerous trend

Key in RM1.2k/mth income.

Under 1 mins already know can loan RM3.6k.

This is a loan trap, BNM better do something about this.

Anyway, thier target group is not someone can sense the danger. pic.twitter.com/zyVbPKuC7M

— Beh Woei Tong (@BehWoeiTong) April 1, 2022

Touch 'n Go, however, said the application process will take one business day upon the complete submission of the documents required.

"Returning users will enjoy same day approvals. We have designed the process to be as user-friendly as possible and hope to continue to improve as we solicit feedback from users."

"We will make sure that all applicants are thoroughly screened for their creditworthiness as we also take into account their actual salary as part of the evaluation criteria," said the group.

“Given that we are making this product accessible to the masses, we are fully focused on ensuring that those taking on our loans can afford to service the repayments.

”The underlying product for GOpinjam is provided by CIMB Bank and as such, all product features follow Bank Negara Malaysia’s responsible lending guidelines - which has consumer protection at the forefront.

"In addition, we have been running programmes with certain partners to educate people on the importance of having a credit history and how they should approach understanding things like an individual credit score. And we will continue to carry out these types of activities as time progresses," Touch 'n Go added. - Mkini