Govt allows EPF members to use savings in Account 2 as collateral for bank loans

• Prime Minister Datuk Seri Anwar Ibrahim: I welcome different opinions; I do not agree in principle with a special withdrawal of the people’s retirement savings. [But] I will ensure EPF allows contributors who have money yet facing financial difficulties to borrow from banks by using their EPF savings as collateral or guarantee

KUALA LUMPUR (March 9): The government has given the green light to Employees Provident Fund (EPF) contributors to use the savings in their Account 2 as collateral for bank loans to tide through difficult times, Prime Minister Datuk Seri Anwar Ibrahim announced.

“I welcome different opinions; I do not agree in principle with a special withdrawal of the people’s retirement savings. [But] I will ensure EPF allows contributors who have money yet facing financial difficulties to borrow from banks by using their EPF savings as collateral or guarantee,” he told the Dewan Rakyat on Thursday (March 9).

In a statement released subsequently, Anwar provided the details on this measure, whereby contributors who need cash are allowed to use their savings in EPF Account 2 as collateral to take up personal loans from banks.

“I have instructed EPF to examine the best method to implement this measure,” he said in the statement.

Earlier in the Dewan Rakyat, Anwar reminded the public that EPF is meant for retirement savings, and that other countries globally have stopped this kind of special withdrawals, such as Australia, Peru and Chile.

“EPF has become a hot topic because many MPs raised this issue, and I welcome it, but we have to remember the principle of EPF is retirement savings,” he said in his winding-up speech for the policy stage debate of the revised Budget 2023.