Anwar: EPF collateral for loan plan does not involve withdrawal

Prime Minister Anwar Ibrahim has clarified that the plan to allow Employees’ Provident Fund contributors to use their savings as collateral for loans does not involve any withdrawals from their savings.

Anwar (above) confirmed that the plan would only apply to those who are in dire straits and withdrawals would not be permitted.

“We are no longer in the Covid-19 pandemic and people are back to work.

“But there are urgent cases, for example, contributors have savings but can’t afford to pay their children’s education fees abroad, we give consideration to these cases,” he told reporters after launching the 2023 World Water Day celebration in Ipoh.

“So, this is for such cases, but we don’t allow them to withdraw from their EPF savings and there are fixed regulations.

“If you ask me personally, I wouldn’t want that too, but there are specific cases with valid reasons. There is one case with savings of RM1 million, but the contributor is desperate (for funds). So we need to consider such cases,” said Anwar, who is also finance minister.

He also said that allowing contributors to use the EPF funds as collateral for bank loans does not violate the EPF Act.

Anwar added that the matter had been discussed with the EPF and there were no obstacles to implementing it.

This came after he announced in the Dewan Rakyat on Thursday that the government would introduce a method that would allow contributors who are in dire straits to take up loans from a bank with collateral from their EPF.

Earlier today, Bersatu Youth chief Wan Ahmad Fayhsal Wan Ahmad Kamal claimed that Anwar’s government has failed to assist those in dire financial straits even with a line-up of prominent economic advisers.

Rather than allowing targeted withdrawals by EPF members, Wan Fayhsal said Anwar had instead given the people what they did not ask for.

“That’s not what the rakyat want. If you were to check all the comments, at least by netizens, I think all the comments are negative towards that proposal,” claimed the Machang MP. - Mkini