11 July 2019

No car loans for PTPTN defaulters but yes to home loans – Govt’s double standards risks bank credit crunch

Minister of Housing and Local Government Zuraida Kamaruddin must confirm if National Higher Education Fund Corporation (PTPTN) defaulters who are unwilling to repay their study loans or are unable to afford repayments can be trusted to repay or are capable of purchasing and repaying their home loans if they are now eligible to apply for one.

Home ownership is worth encouraging. However, it is more important to cultivate a sense of responsibility among young people. PTPTN was established to enable young adults to complete their higher learning studies through dispensation of loans and for them to repay their loans to enable the next batch students to pursue further studies. However, this trust and principle has been abused by many who opt to overlook settling their PTPTN loan. Loans must be repaid. Debts must be settled. This is the position which we have always emphasised.

Irrespective of the Harapan Manifesto or the Minister’s announcement, PH does not uphold responsible values in society in terms of PTPTN loan repayments. On the contrary, in order to hype up the populist card, PH switches its position and it is the public which is left at a loss.

Previously, PH had removed the immigration blacklist for PTPTN defaulters. However, their names were still handed to the more stringent Central Credit Reference Information System (CCRIS) for financial institutions to refer to when considering to approve or reject future loan applications. Thus, borrowers who did not service their PTPTN debts will encounter difficulty in obtaining car loans, home mortgages or other personal loans.

However, now Zuraida has also informed that their names will no longer be blacklisted under the Credit Reference Information System (CCRIS) for the purpose of buying a homes.

Given Zuraida’s sudden announcement on 10 July 2019, that borrowers who have arrears with PTPTN may purchase a home but not a car, how serious is the PH government in recovering the non-performing loans?

The Housing and Local Government Minister’s announcement exposes the hypocrisy of PH and also destroys society’s values that loan recipients must repay their debts. Even worse, lending money to applicants who do not qualify poses a higher risk of a credit crunch on Malaysia’s financial system.

Tan Chee Hiong
MCA Youth Deputy Chairman

-MCA online-