Madani govt initiatives boost financial security, home ownership for S’wakians

THE Madani government has introduced numerous programmes under the 2024 national budget in its efforts to improve the living standards and wellbeing of Malaysians.

Among them are the Housing Credit Guarantee Scheme (SJKP), which provides Malaysians with greater access to home ownership, and Employees Provident Fund (EPF) Akaun Fleksibel (Flexible Account) that offers financial flexibility without eating into the people’s core retirement savings.

Both schemes have been beneficial for Sarawakians, helping to ease their financial pressures, while promoting responsible management of savings and housing investments.

The SJKP initiative is a government-backed housing loan guarantee scheme designed to assist individuals without a fixed income or formal salary statements, so as to secure home financing.

It is one of the government’s initiatives under the Malaysian Housing Financing Initiatives (i-Biaya) launched by the Ministry of Local Government Development in collaboration with the Ministry of Finance.

Launched with the objective of promoting homeownership among lower-income and self-employed individuals, SJKP guarantees up to 120 per cent of the loan amount, which enables applicants to purchase homes without the usual requirement of a hefty down payment.

This initiative significantly reduces the financial barriers faced by those who struggle to qualify for traditional home loans due to irregular income streams.

As at June this year, the government had received a total of 57,752 applications for the scheme, in which RM12.77 billion was approved.

Local Government and Housing Minister Nga Kor Ming said the number of applications received this year increased drastically, as compared to 23, 569 applications received last year, amounting to RM5.9 billion.

Nga also said the 34-year loan period under the scheme was the maximum limit set by Bank Negara, where borrowers can settle the loan earlier.

Among the beneficiaries of the scheme is 36-year-old property negotiator Ezry Safarina Hassan.

Ezry was able to secure her first home in Bandar Baru Samariang with only one year’s worth of bank statements, payment vouchers, and an offer letter from her agency.

“This scheme is helpful for individuals who do not have a fixed salary. It’s much easier to qualify for SJKP, as compared to traditional loans where banks usually consider 60 to 70 per cent of the applicant’s income. Meanwhile, SJKP considers 100 per cent,” she said.

In the case of first-time property buyer Nur Aziemah Rakawi, 36, the ability to obtain 100 per cent financing without a deposit was a key factor in her decision to apply for SJKP.

“The process was straightforward. After the bank assessed the market value of the property, I received the approval for the application in five days,” she recalled.

Also, Nur Aziemah had qualified to include the Mortgage Reducing Term Takaful and legal fees in her loan package, making the purchase of her home in Bandar Baru Samariang increasingly manageable.

Meanwhile, Ezry highlighted the scheme’s flexibility with income verification as applicants are not required to submit their salary statement but instead provide bank statements, photographs of the business’s premise, or appointment letters.

“The approval process is simple, as long as the individual is not blacklisted by Bank Negara Malaysia and possesses a good credit score,” she said.

She added that joint loans are also an option under SJKP, allowing applicants to combine the income amount with their spouse or parents, so as to strengthen the approval of their application.

While interest rates for SJKP loans are slightly higher than that of conventional loans, Ezry believes that the benefits outweigh the costs.

The EPF Account Restructuring Initiative, implemented on May 11, introduced the Flexible Account designed to support contributors with short-term financial needs.

The restructuring aims to provide greater financial flexibility by allowing members to withdraw from their Flexible Account, a newly created sub-account within the EPF structure, alongside the Retirement Account (originally known as Account 1) and Wellbeing Account (Account 2).

The main goal is to offer accessible funds for emergencies such as medical expenses, educational fees, or temporary financial strains, without tapping into their long-term retirement savings in their Retirement and Wellbeing Accounts.

The Flexible Account allows members to withdraw a portion of their savings, depending on their contribution and age, while ensuring that they continue to grow their retirement funds.

All contributions after May 11 were allocated into the three new accounts according to the following manners: 75 per cent into the Retirement Account; 15 per cent (Wellbeing Account); and 10 per cent (Flexible Account).

From May 11 to Aug 31 this year, members had a one-time option to transfer part of their savings from their Wellbeing Account into their Flexible account. If the member does not choose to opt-in for an initial amount, no transfer will be made and the existing balance will remain in the account.

For Gabriellia Hazel Donald, a 26-year-old receptionist, the availability of the Flexible Account is a significant reassurance, especially for emergency situations.

“I’ve yet to make any withdrawals from my Flexible Account but knowing it’s available for emergencies gives me peace of mind,” she said when interviewed by The Borneo Post recently.

Similarly, 25-year-old maintenance supervisor Alexander Terry emphasised the importance of accessing his EPF funds in cases of medical or financial emergencies.

“It provides short-term relief without compromising my core savings, which is comforting,” he said.

However, Alexander believes that the withdrawal options should be expanded to cover other needs, such as education or entrepreneurial endeavours.

“More educational resources on balancing short-term and long-term savings would also be helpful,” he added.

Likewise, Abdul Rahman Yusuf, a 26-year-old engineer, also notes the value of the Flexible Account, but warns other members to exercise caution in managing their funds.

“The 10 per cent allocation to the Flexible Account is reasonable, but there is a risk of members becoming too reliant on it, which may lead to poor management of one’s finances,” he said.

In a parliamentary written reply on July 9, the Ministry of Finance had said EPF members withdrew RM7.81 billion from the Flexible Account as at June 24.

The Ministry said 3.61 million or 27.8 per cent of the total EPF members under the age of 55 decided to transfer an initial amount from their Wellbeing Account to their Flexible Account, with a total transfer of RM11.52 billion made as at that date.