Thursday, February 12, 2009

 

Help consumers with easy loans, banks told


Help consumers with easy loans, banks told

Published on: Thursday, February 12, 2009

Kuala Lumpur: Banks should take proactive measures to help boost consumers' confidence by providing easy term loans, overdraft facilities and other forms of flexible credit, the Federation of Malaysian Consumers Association (Fomca) said Wednesday.

Its secretary-general Muhammad Shaani Abdullah said such credit availability would be useful, particularly to small businessmen intending to expand their businesses and those wanting to buy houses and motor vehicles or invest in the stock market.

He said there was sufficient liquidity in the banking system to allow such a move which would go a long way to create a positive ripple effect on the country's current economic situation.

Muhammad Shaani said at present small businesses and self-employed people were finding it difficult to obtain credit facilities from banks.

Banks, according to him, were placing too many conditions for these groups to obtain credit.

"We are not suggesting that banks should not be cautious or diligent in approving loans, but they could at least be more flexible and humane," he said.

Meanwhile, banking sources told Bernama that some financial institutions, including major banks, were already providing such facilities to existing customers and new account holders.

The sources said that most institutions were, however, waiting for the government to unveil the supplementary mini budget.

The government is expected to table in Parliament a special mini budget as an economic stimulus package soon.

It had announced a RM7 billion economic package last November which was being disbursed.

However, some economists and financial analysts were of the view that the effects from the package would take some time to be felt in the local economy.

This was because some of the projects to be undertaken under the package would take a year or two for gestation and to produce the desired results.

"We cannot wait for such a long period, what we need is something which can produce immediate contagious effect and give a boost to the sluggish economy in the shortest possible timeframe," said economist P.K. Chua of Majujaya Investors Bhd.

Freelance financial analyst Mohd Akmal Majid agreed with FOMCA that during an economic downturn, consumers' confidence should be enhanced so that they would not be afraid to spend.

"Once consumers are assured of job security and steady income, then they can begin confidently to spend and this will boost the economy," he said.- Bernama

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