‘Rein in super-easy personal loans’

Maybank wants the authorities to tighten control on the ease with which personal loans are being given out to consumers. CEO Datuk Seri Abdul Wahid Omar cited personal loans given out either by non-bank entities or “over-competitive” banks, as worrying.
“We need stronger enforcement from the authorities on the personal loans issue as it is becoming a cause for concern,” he said after the group's annual general meeting.
Wahid suggested that non-bank lenders were quite lax when giving out personal loans, saying that these institutions should look at adopting some of the same standards as banks, especially when underwriting the loans.
“Those involved should not simply disburse personal loans based solely on salary deductions to attract customers,” he said.
He also expressed concern that there was “over-competition” in Malaysia's banking sector, with banks being aggressive in pricing their loans to attract customers.
On Maybank's loan growth this year, Wahid said it was expected to slow as it was typically twice that of the country's GDP growth rate which is also expected to slow this year, but added that the quality of its assets would continue to improve.
It is widely expected that the Government will address household debts in Budget 2012 to be tabled by Prime Minister Datuk Seri Najib Tun Razak next week.
Bank Negara's figures in March showed that personal loans made up 15% of the overall household debt but housing loans make up the largest portion at 45%, followed by car financing at 20%, credit cards (5%) and purchase of securities (5%).
The Star recently reported that about 147,000 people who were facing personal debt problems had enrolled in financial distress and management programmes sponsored by Bank Negara's Credit Counselling And Debt Management Agency since 2006.