PETALING JAYA: Employees Provident Fund (EPF) members should be allowed to use their contributions as collateral for bank loans, says an economist.
Shazali Abu Mansor of i-CATS University College, Kuching said banking institutions could accept EPF savings as collateral to give out loans to those facing financial difficulties such as debt. He said this was one of the alternatives the government could consider in the face of renewed calls by NGOs for EPF contributors who were financially affected by the Covid-19 pandemic to be allowed to make another round of withdrawals.
“For example, for those with an accumulated contribution of less than RM10,000, it may be possible to reduce their contribution rate to as low as 4.5%, while the rate for those with more than RM10,000 could be set at 8%,” she said. Meanwhile, an economic analyst at UniKL’s Business School, Aimi Zulhazmi Abdul Rashid, said if EPF withdrawals were to be allowed again, they should be credited to the members’ bank accounts to settle their outstanding debts or adjust their loan repayments.
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