Finance Minister Lim Guan Eng said banks should also relax their lending guidelines to not just first time homebuyers, but returning buyers and all types of businesses. (Pic by NSTP/SALHANI IBRAHIM)

KUALA LUMPUR: The government will not be pleased if banks continue to restrict their lending procedures given the economic climate, said Finance Minister Lim Guan Eng.

This was shared by Lim on the sidelines of the Securities Commision (SC)-hosted Fintech Roundtable here today.

The SC also released a new property crowdfunding framework following amendments made to its Guidelines on Recognised Markets.

“Banks should be a bit more forward to help the country grow. As an open economy, we are of course influenced by the ongoing friction between the United States and China. Within this context, banks can play their bit by allowing more lending,” he said.

Lim said the first quarter gross domestic growth of 4.5 per cent, announced by Bank Negara Malaysia yesterday, had exceeded expectations.

“However, we believe that we are able to see better numbers in the quarters ahead. Banks therefore need to lend more and do not restrict further when it comes to lending as the government will not be happy with this,” he added.

He stressed that banks should also relax their lending guidelines to not just first time homebuyers, but returning buyers and all types of businesses.

Lim is hopeful that the new property crowdfunding framework would address the ongoing property oversupply in the Klang Valley and across Malaysia.

“With this, and the rise of fintech through equity crowdfunding (ECF) or peer-to-peer (P2P), we could address this problem. In fact the government is also looking at announcing fintech related incentives in Budget 2020, as to help further spur this booming segment,” he said.

Earlier in his speech, Lim said the low financial literacy among young Malaysians and retirees was of significant concern.

“A study by S&P Global Literacy Financial in 2014 reported that financial literacy rate in Malaysia is only at 36 per cent, compared with 59 per cent in developed countries.

“Given that fintech players are now an integral part of our broader ecosystem with their power to bring in innovation, agility and new sources of financing, the onus is on the stakeholders from the financial services ecosystem to take steps towards driving financial awareness and literacy among consumers, investors, lenders and businesses,” he added.

Meanwhile, SC chairman Datuk Syed Zaid Albar said that the revision was done in order to heed the government’s call for the Malaysian capital markets to leverage on technology.

“In the 2019 Budget announcement, the government stated that it intends to leverage technology-enabled and innovative mechanisms to provide an alternative funding source for first-time homebuyers, through a property crowdfunding scheme.”

“To support the integrity of the scheme and protect investors’ interest, the revised guidelines list out the requirements and obligations of a property crowdfunding platform operator which include minimum shareholders’ funds of RM10 million, obligation to provide fair, clear and timely information to both homebuyers and investors as well as exit certainty at the end of the agreed tenure.”

Bank Negara estimated that 43,219 residential units, with total value amounting RM29.7 billion remain unsold as of the third quarter of 2018.