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Low financial literacy hindering homeownership in Malaysia

One often overlooked issue hindering homeownership is the lack of financial literacy among Malaysians.

“Financial literacy remains low and people somehow don’t fully understand what it takes to own a property,” RHB Bank head of group mortgages and ASNB business Anuar Amin said at a roundtable discussion today organised by the Asian Strategy & Leadership Institute (ASLI) and its Centre for Public Policy Studies (CPPS).

Anuar said he has seen some low income earners attempting to buy homes which were way beyond their means.

Meanwhile another panellist Sunway University Business School lecturer Dr Henry Cheah Chee Wei noted that many young Malaysians trying to obtain home loans are National Higher Education Fund Corp (PTPTN) loan defaulters and this affects their credit profile.

As a result, it is harder for them to obtain a mortgage when they want to buy a house, added Cheah.

“One of the reasons some of our youths could not get a mortgage is because they have defaulted on their PTPTN loan repayments. Most of them just take it for granted. But when you have bad repayment records, banks will hesitate to lend to you,” he said.

Anuar concurred, adding that it is a fundamental issue and the bank has been seeing a lot of such cases.

Both Cheah and Anuar believe education is the key to address the issue of low financial literacy.

“I think education plays an important role. We need to educate the youths that repayment is an obligation,” said Cheah.

Meanwhile, Anuar lauded an online online financial education module set up by the Credit Counselling and Debt Management Agency to educate the public about basic financial literacy.

Themed “The State of Property Financing for the Youth and B40”, the other panellists at the roundtable  were Institute for Democracy and Economic Affairs (Ideas) senior fellow Dr Carmelo Ferlito, University Malaya faculty of built environment’s department of estate management associate professor Dr Rosli Said, Universiti Teknologi Mara (UiTM) faculty of architecture, planning and surveying senior lecturer Dr Rohayu Abdul Majid, Real Estate and Housing Developers Association Malaysia (Rehda) Selangor treasurer Loo Chee Yang, Rehda public affairs, communication and membership services assistant manager Siti Aswahawa Mohd Amin, a member of the public Wong Mun Ching and Khazanah Research Institute research assistants Muhammad Nazhan Kamaruzuki and Puteri Marjan Megar Muzafar.

The roundtable was moderated by CPPS senior director Dr Lyana Khairuddin.

Source: Edge Prop

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