YOURSAY | ‘Banks decide who they give loans to, not govt.’

Bankrupts allowed loans backed by EPF collateral - Wan Saiful

Coward: Former Bersatu information chief Wan Saiful Wan Jan, may I recommend that you do your homework before commenting?

You demonstrated a distinct lack of financial knowledge and common sense, which I must say is scary. Be prepared to be torn into shreds by the ruling coalition.

First, why ask Prime Minister and Finance Minister Anwar Ibrahim about how the loan can be approved? Ask the bank in question instead.

If you’re not happy with the answer, ask the Insolvency Department. Only if you are still not happy, ask the ministry about specific points that you think are wrong.

Ministers are there to set policies. If it is a policy issue, you raise it with them.

All you have shown here is a bank or a few banks approve loans when someone is still bankrupt. That is not a ministerial problem but a bank problem.

There is a difference between loan approval, opening a loan account, having the loan money made available in the account and the loan is finally made available.

From what I see, there is nothing wrong here. The person is most likely ready to be discharged, so he is doing the best thing for himself by arranging for the loan to take effect as soon as he is discharged.

There is nothing wrong with approving the loan and getting everything ready for the bankrupt borrower to use once he is out of bankruptcy.

As you said, the loan is on condition that the borrower shows the bank his discharge document. No documents, no loans.

Hence, there is no problem with the law. If you are really for the borrower, make sure he did not get charged interest if he did not take up the loan.

I want to chastise Wan Saiful. If he manages to get the banks to change their minds and not consider loans for them, he is doing soon-to-be discharged bankrupt persons a terrible disservice.

He is putting obstacles in their rehabilitation. I disagree that the loan is bad for the person.

It is one of the odd cases that the scheme actually makes sense. If he gets the loan dispensed to him, it is the lowest possible interest rate he is going to get.

As a recently discharged bankrupt he would not have any assets to secure his loan on.

His credit rating will also be very bad because the eight percent unsecured loan you and I can get is not available to him.

He is looking at more than 10 percent. A five percent rate is a god sent to him. (To the person whose account is shown, I commend you for preparing for your post-discharge days and hope you get it. Please use the loan money wisely).

I am not going to teach Wan Saiful how compound interest works. Maybe he is one of those people who buy houses in cash.

The rest of us mortals will have to take up a loan. At three percent interest over 25 years, I pay double the amount that I borrowed.

Is he going to tell me not to borrow?

Mazilamani: I wish I knew something about loans as commented by @Coward.

As my understanding before reading Mr Coward's comment, what seems to be a problem with Wan Saiful is if the bank was prepared to approve a loan application for a person declared bankrupt.

The people getting into trouble because of the defaulted loan will be the approving officer and bank manager.

Noticing the weak case of the applicant, the bank will definitely ask for a guarantor.

No way the bank will go after Wan Saiful or the finance minister. So why drag in the finance minister and the government?

Just a Malaysian: A bankrupt should know he cannot get loans from the bank, and yet he tries anyway.

Wan Saiful is blaming the government for this person’s actions. He is running out of issues, isn't he?

He is throwing tantrums over small issues. He probably missed his high salary and important positions since he became jobless.

泰哥: If the financial institution wants to loan to a bankrupt with EPF as collateral, it is their prerogative and within their mechanism of approval or disapproval.

Why is Wan Saiful barking up the wrong tree?

Lone_star: If a bank wants to lend money to a soon-to-be discharged bankrupt, the bank must be smarter than this smarty pants. The bank probably sees potential in this person.

Wan Saiful wants the government to abolish the EPF Account 2 Support Facility (FSA2) scheme. Why? He wants the government to instead adopt his suggestion for targeted EPF withdrawals.

Unfortunately, this smart alec is not the finance minister.

Abba: By approving the loan and depositing in the accounts of those bankrupts shows that the help is there and real. It shows that the EPF FSA2 scheme by the government is serious in its intention to help.

Now, these bankrupts have to help themselves by getting the Discharge Document from the Insolvency Department, so that the loan is nice and legal to be used. It's a lifeline for them to start anew. So, the Insolvency Department people should also respond in kind.

What have they, the Insolvency Department personnel, got to lose?

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