Prominent banker Nazir Razak, warning of the risk of a debt crisis, has lauded the firm remarks by Finance Minister II Johari Abdul Ghani to quash a proposal for developers to provide housing loans.
Nazir commended Johari for speaking out quickly and firmly on what he called a ‘dangerous idea’, saying: “More unregulated lenders and sub prime borrowers will compound the risk of a debt crisis.”
In an online posting, Nazir quoted Johari’s remark that the proposal “looks like a very unsustainable business model, for developers to borrow money to complete the project and at the same time give loans to house buyers.”
Nazir, who is CIMB Group chairman, said the focus should be on providing access to loans at fair prices from banks, giving subsidies on their borrowing to the most needy, and making more affordable housing available.
Urban Wellbeing, Housing and Local Government Minister Noh Omar had proposed granting moneylending licenses to developers so that they could provide housing loans of up to 100 percent to property buyers.
He had called it “a win-win solution for both developers and house-buyers” in a speech at a property conference on Thursday.
FMT Reporters Online