KUALA LUMPUR: The government will allow a special collateral agreement to assist Employees Provident Fund (EPF) contributors through bank loans.
Prime Minister Datuk Seri Anwar Ibrahim said the collateral agreement was more suited to assist contributors who were in "desperate" need without having to withdraw their savings.
"I am open to all criticism made against me for not allowing another round of withdrawals. However, we need to adhere to the principle that this is retirement savings.
"Many countries that previously allowed the same initiatives had stopped giving the withdrawals as it was only done due to the Covid-19 pandemic.
"Hence, I will ensure that EPF gives space towards the contributors who have sufficient money in their account to make loan agreements with banks," he said during his winding-up speech on the 2023 Supply Bill in Dewan Rakyat, today.
Meanwhile, Anwar said the agreement would allow flexibility for contributors from the informal sectors, including those who were self-employed and had inconsistent income.
"This is a better option for those who are tied with their business debts, which can reach up to RM200,000 in certain circumstances.
"In some cases, contributors were also tied as they have the money (in their account) but cannot withdraw it.
"Hence, that is why we are saying that is a collateral agreement, they don't have to withdraw from EPF but at the same time their savings are made as collateral."
Previously, Prime Minister Datuk Seri Anwar Ibrahim announced that the government was finding ways to reduce people's financial burden without them having to withdraw their EPF savings.
Anwar said this was because the people had already been allowed to make several EPF withdrawals before, which had certainly caused the amount of their retirement savings to decline.
Meanwhile, Deputy Finance Minister Datuk Seri Ahmad Maslan said the median savings in the EPF accounts of all Malaysians declined 50 per cent to RM8,100 last year from RM16,600 the year before the Covid-19 pandemic hit.