Friday, February 24, 2012

THE POOR, EPF AND THE DUMMIES IN PAKATAN RAKYAT - FINAL

As promised, today i am writing the final chapter of my three (3) part series article titled "THE POOR, EPF AND THE DUMMIES IN PAKATAN RAKYAT". The previous two (2) articles has touched on the following items:

1. A brief history - talking about the PPR residents request and grouses. 
2. Objective - talking mainly about the objective of developing this scheme for the poor
3. Approach/ Process taken
4. Brief summary

Today, i would write about the following items:

1. Payment structure involving EPF, SPV, DBKL and future house owners. 
2. Benefit of this loan to the poor
3. Rebuttal to all allegations by Tony Pua and Nurul Izzah 

Payment Structure


There was a lot of rubbish being mentioned by the opposition, especially Tony Pua and Nurul Izzah, who condemned the government for using EPF fund to finance this scheme. Their main concern was why provide direct loans to the poor, when they can't even get a bank loan? To answer this question, please look at the diagram below. 

Flow diagram of loan from EPF to house buyers

From the diagram above, it can be clearly shown that the loan from EPF/KWSP goes to the SPV that will be created under Yayasan Wilayah. However i would explain in detail the diagram above in detail:

1. DBKL offers PPR residents the opportunity to purchase their current houses. 
2. Once they have agreed, DBKL would sign the S&P agreement with the SPV which subsequently sign an agreement with the house buyers. 
3. The house buyers pays their installment to the SPV, and the SPV pays it to EPF. 
4. The loan from EPF is guaranteed by DBKL. So it is secured. 

Benefit

Firstly, to purchase the PPR houses, the current residents do not need to put any downpayment. Compared to loan by financial institution, where a minimum of 10% downpayment is required. This in itself benefit the poor and helps to reduce their burden. 

Secondly, the loan given by the government is 100%, inclusive of lawyer fees and insurance. 

Thirdly, there are no maximum age restriction to apply for this loan. The minimum age is 18. However, depending on situations, a co-borrower needs to be appointed if the applicant is too old or is not working. 

Fourthly, the loan tenure is up to 25 years, which in turn would not put a heavy burden on the buyers. Furthermore, the houses are being sold at below market price since it is directly sold by DBKL and not third party owners. 

Opposition lies

There has been a lot of accusation and lies by the opposition regarding this scheme as they know that the implementation of this program would help thousands of low income earners in the city to own assets. This in turn would result in the opposition losing thousands of votes in the coming GE.

The statement by Tony Pua that this scheme would result in a sub prime crisis is totally rubbish.The Malaysian property market is worth RM 260 billion and the loan given to the poor is only RM 1.5 Billion. This only constitute 0.5% of the total housing loan in Malaysia!

Nurul Izzah statement that the lending rate should be reduced to 2% percent shows that she is a hypocrite. At first when the scheme was announced, she, together with Tony Pua said that loans should not be given to the poor, and now she want's it at 2%. Flip flop?

Baru Bian allegation that this scheme has many uncertainties has been answered in this blog. To whoever thinks that the explanation is unsatisfactory, i would not mind meeting you in person to explain this issue. 

Berkhidmat utk rakyat, dan kepada ALLAH swt kami berserah.

@kabir_akram

Note:  I am comfortable with anybody who copy this article. As my main intention of bloging in the public domain is to disseminate information to the public. Furthermore If you do not want to link it back to my blog its also ok. Thanks


10 comments:

  1. good info & brief indeed!

    ReplyDelete
  2. I've been waiting for the last installment. Thank you for the three parts series.

    I do however have a query if you don't mind.
    What would happen if the poor have difficulty in paying back the loan on time, would the home be foreclosure?
    Which i think is normal even if the lender is a bank.

    The scheme is a right direction helping those people really wanting a safe place in the city. for that I applaud all parties involved.

    ReplyDelete
  3. Dear Zakzak,

    If the tenants/house buyers are unable to finance the loan, the SPV and DBKL would take back the home and offer it back to the house buyers which are kept in the waiting list. This would be the SOP for everybody involved in this program.

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