THE POOR, EPF AND THE DUMMIES IN PAKATAN RAKYAT - FINAL

As promised, today i am writing the final chapter of my three (3) part series article titled "THE POOR, EPF AND THE DUMMIES IN PAKATAN RAKYAT". The previous two (2) articles has touched on the following items:

1. A brief history - talking about the PPR residents request and grouses. 

2. Objective - talking mainly about the objective of developing this scheme for the poor

3. Approach/ Process taken

4. Brief summary

Today, i would write about the following items:

1. Payment structure involving EPF, SPV, DBKL and future house owners. 

2. Benefit of this loan to the poor

3. Rebuttal to all allegations by Tony Pua and Nurul Izzah 

Payment Structure

There was a lot of rubbish being mentioned by the opposition, especially Tony Pua and Nurul Izzah, who condemned the government for using EPF fund to finance this scheme. Their main concern was why provide direct loans to the poor, when they can't even get a bank loan? To answer this question, please look at the diagram below. 

Flow diagram of loan from EPF to house buyers

From the diagram above, it can be clearly shown that the loan from EPF/KWSP goes to the SPV that will be created under Yayasan Wilayah. However i would explain in detail the diagram above in detail:

1. DBKL offers PPR residents the opportunity to purchase their current houses. 

2. Once they have agreed, DBKL would sign the S&P agreement with the SPV which subsequently sign an agreement with the house buyers. 

3. The house buyers pays their installment to the SPV, and the SPV pays it to EPF. 

4. The loan from EPF is guaranteed by DBKL. So it is secured. 

Benefit

Firstly, to purchase the PPR houses, the current residents do not need to put any downpayment. Compared to loan by financial institution, where a minimum of 10% downpayment is required. This in itself benefit the poor and helps to reduce their burden. 

Secondly, the loan given by the government is 100%, inclusive of lawyer fees and insurance. 

Thirdly, there are no maximum age restriction to apply for this loan. The minimum age is 18. However, depending on situations, a co-borrower needs to be appointed if the applicant is too old or is not working. 

Fourthly, the loan tenure is up to 25 years, which in turn would not put a heavy burden on the buyers. Furthermore, the houses are being sold at below market price since it is directly sold by DBKL and not third party owners. 

Opposition lies

There has been a lot of accusation and lies by the opposition regarding this scheme as they know that the implementation of this program would help thousands of low income earners in the city to own assets. This in turn would result in the opposition losing thousands of votes in the coming GE.

The statement by Tony Pua that this scheme would result in a sub prime crisis is totally rubbish.The Malaysian property market is worth RM 260 billion and the loan given to the poor is only RM 1.5 Billion. This only constitute 0.5% of the total housing loan in Malaysia!

Nurul Izzah statement that the lending rate should be reduced to 2% percent shows that she is a hypocrite. At first when the scheme was announced, she, together with Tony Pua said that loans should not be given to the poor, and now she want's it at 2%. Flip flop?

Baru Bian allegation that this scheme has many uncertainties has been answered in this blog. To whoever thinks that the explanation is unsatisfactory, i would not mind meeting you in person to explain this issue. 

Berkhidmat utk rakyat, dan kepada ALLAH swt kami berserah.

@kabir_akram

Source : THE KUALA LUMPUR CHRONICLE

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THE POOR, EPF AND THE DUMMIES IN PAKATAN RAKYAT - PART 1

These past few weeks, there has been a lot of talk and criticism by the opposition regarding the announcement made by PM Datuk Seri Najib Tun Razak on the implementation of a scheme for poor city residents to own the Project Perumahan Rakyat (PPR) flats. The bone of criticism by the opposition are as follow, which i have picked up from various blogs around:

1. Government to impose an interest rate of 2% for those purchasing the Public Housing Project (PPR) flats using funds from the Employees Provident Fund (EPF). - Nurul Izzah
2. There are many uncertainties linked to EPF's RM1.5 billion loan to the government.- Baru Bian
3. Employee Provident Fund will be extending RM1.5 billion in loans directly to those who failed to secure commercial loans to purchase their houses. - Tony Pua

I will be addressing these three (3) statements done by the opposition (PKR and DAP), I wonder if PAS had anything to say or they are now merely a political party that is in charge of only Islamic/Religious and Malay custom affairs? So like those days before independence where the Sultan was in charged of these portfolios whereas the British took control of the economy and what not. But that i will touch on another day.

First of all, before i proceed with breaking down the arguments of these so called Yang Berhormat (YB's) and Economic experts, lets have a look at the history of the urban poor and this scheme:

A BRIEF HISTORY

1. Request by PPR tenants to purchase the house they are currently residing in.
2. Government agreed to the request, on 11 July 2009, YAB Prime Minister DS Najib Tun Razak announced the sale of 44,146 unit of PPR houses.
3. However, the financing for these units were dependent on the application of purchase by residents, and approval of their respective bank loans.
4. No special scheme was there for this residents.
5. Out of the 44, 146 units, 4,988 had successfully bought their homes (approx 15%) with 716 using personal loans, and 4,272 paying with either their savings or using up the EPF monies.
6. Upon identifying that many of the residents did not managed to get bank loans, the government initiated and developed a special scheme to assist these residents.
7. On the 7 October 2011 the scheme was approved by the cabinet with minor amendments. Note that it took two (2) years for the relevant ministry to do their homework, and to obtain the Cabinet approval. Therefore allegations that this was an ad-hoc scheme to buy voters is utterly baseless.
8. 18 January 2012, the final approval from the Cabinet was received. Note: Up till now, from the first announcement by the PM to the development of the scheme took approximately 2 and a half year.
9. 28 January 2012, the Prime Minister announced the implementation of this scheme.

In Part - 2, i would talk about the objective of this scheme, and the approach/process taken.

Berkhidmat utk rakyat, dan kepada ALLAH swt kami berserah.

@kabir_akram

Source: The Kuala Lumpur Chronicle

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