Ahmad Maslan: EPF Account 2 Support Facility applicants could be blacklisted in case of default

• EPF Account 2 recently became a hot topic after Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said last month that the government is considering using EPF savings as collateral for emergency loans, after the opposition repeatedly called for more EPF withdrawals to be allowed.

PUTRAJAYA (April 14): Borrowers of the Employees Provident Fund (EPF) Account 2 Support Facility (FSA2) programme are at risk of being blacklisted if they fail to repay the financing received from the support programme in the required payment period.

"The risk of using this facility is that their names will be blacklisted if they fail to repay the loans," Deputy Finance Minister Datuk Seri Ahmad Maslan (pictured) told reporters on Friday (April 14).

“But in this case of a default, the banks cannot take the money from the borrowers’ EPF accounts until they reach 50 years old, because this facility is not collateral,” he explained.

EPF Account 2 recently became a hot topic after Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said last month that the government is considering using EPF savings as collateral for emergency loans, after the opposition repeatedly called for more EPF withdrawals to be allowed.

Last week, the EPF announced that its eligible members who are 40 years old and above can apply for personal financing from banking institutions by using their Account 2 balance as support for their loans.

The first phase of the programme, which is for those over 40 years old, began on April 7, while the second phase, for those under 40, will be announced in due course.

Amid various reactions from the public, the EPF clarified last week that FSA2 is targeted at those who have income.

Ahmad Maslan meanwhile commented: “The alternative for this facility is the borrowers must have around RM3,000 to RM50,000 in their Account 2. For example, if they have RM4,000 in their account, then the maximum amount they can borrow is RM4,000. If they have RM60,000 in their account, the maximum amount they can borrow is RM50,000.

He also added that members must continue to make monthly repayments with an annual interest rate of 4.5%.

“Despite the monthly repayments, they can enjoy an annual dividend of around 5% to 6% in their EPF accounts. This annual dividend is even higher than the interest of 4.5%,” said Ahmad Maslan.

As of Tuesday, a total of 27,705 contributors aged 40 and above were eligible for FSA2. So far, two banks are participating in the programme, namely MBSB Bank and Bank Simpanan Nasional.