Implementation of Responsible Financing Guidelines contributed to reduced access to financing.
Claim: Implementation of Responsible Financing Guidelines contributed to reduced access to financing.
The implementation of responsible financing guidelines by BNM serves to protect individuals’ interests so that they borrow within their capacity to repay the loans throughout the loan tenure. This is to prevent borrowers from falling into financial hardship due to excessive debt burden that may lead to foreclosures which will undermine the objective of home ownership.
Financial institutions are responsible to establish that borrower’s disposable income (gross income less statutory
deductions, expenditure on necessities and all other obligations) is sufficient for debt repayment. This is to ensure that borrowers can continue to service the loan and have enough financial buffers for living expenses, and to deal with any possible future cost increases.
Source: Bank Negara Malaysia