Defending his proposal after criticism from another minister and a banker, Noh Omar said in an online posting that “If they cannot get a loan from the bank, they can do so from developers. It is up to homebuyers to decide. The choice is in their hands and this is just a proposal.”
He said banks had rejected some loan applications from prospective buyers of privately built affordable housing.
“Many affordable housing are being constructed by private developers. Some homebuyers have received offers to buy these homes, but they face problems with the banks,” he said.
He said his proposal was intended to help homebuyers while also encouraging developers to work with his ministry to provide affordable housing,” he said.
Noh had said on Thursday that developers could apply for moneylending licenses to provide loans to homebuyers. The interest rate would be capped at 12 per cent with collateral, or up to 18 per cent without collateral.
He said today that his ministry will conduct a thorough study.
Finance Minister II Johari Abdul Ghani has quashed the idea, which has also been criticised by the National House Buyers Association, and banker Nazir Razak of CIMB Group who said there were risks of creating a debt crisis.
Johari had said that if homebuyers could not obtain bank loans at an interest rate of 4-6 per cent, it was not logical to expect them to be able to cope with a loan that imposed interest of up to 18 per cent.
Developers also needed to take bank loans to finance their projects, and he questioned their capability in also providing loans to homebuyers.