In making the call, Assistant Minister for Housing Datuk Abdul Karim Rahman Hamzah said this would prevent developers charging exorbitant interest on loans and resorting to ‘strong arm tactics’ in loan recovery.
He said anything that could facilitate house buyers especially from the low to middle income categories to own a house was much welcomed.
“If granting developers moneylending licence could help solve problems of purchasers getting financing, it is much welcomed. But the government must ensure the scheme does not cause added burden on purchasers. Interest rates must be competitive with banks and there must be a proper procedure for recovery of loans in the event of default.
“We do not want developers to charge exorbitant interest on loan and use strong arm tactics in loan recovery.
The scheme must be properly regulated and strictly monitored by the government,” Abdul Karim said when contacted yesterday.
He was commenting on a Bernama report recently that the Cabinet had instructed the Ministry of Urban Wellbeing, Housing and Local Government to review and improve the home financing policy stated under the Moneylenders Act 1951 for house purchase.
Its minister Tan Sri Noh Omar reportedly said matters concerning the effectiveness of the policy in helping the people to secure loans for house purchase was discussed and concluded after he explained the housing developer loan facility proposal to the Cabinet during their meeting.
Noh was also quoted to have said the ministry would take proactive measures and look into the effectiveness of the loan facilities under the Moneylenders Act 1951 (Amendment) 2011 (Act 400) to ensure it was not being misused by irresponsible licence holders.
On this, Abdul Karim, who is Asajaya assemblyman, said developers who did not have the financial strength must not be issued the moneylending licence.
The licence must be used solely for purchase of houses built by the developers and not to be misused as an ‘along licence’.
Last week, Noh had proposed an initiative to allow housing developers to offer home loans as there was a provision under the Moneylenders Act 1951 to help house buyers facing difficulty in securing full bank loans.
He said the proposal received mixed reaction from various quarters, as well as speculations on the details of the proposed scheme.
He said the proposal involved financing scheme as stated under the Moneylenders Act 1951 (Amendment) 2011 (Act 400), which is under the jurisdiction of his ministry.