MCA: Ensure developers do not turn into Ah Long

MCA Public Services and Complaints Department head Datuk Seri Michael Chong (centre) says developers who offer loans to property buyers are potential 'Ah Longs.' ― Malay Mail pic
MCA Public Services and Complaints Department head Datuk Seri Michael Chong (centre) says developers who offer loans to property buyers are potential 'Ah Longs.' ― Malay Mail pic

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PETALING JAYA, Sept 11 — Property developers who obtain moneylending licences to provide loans to housing applicants have the potential of becoming Ah Long if their services are not properly regulated.

MCA Public Services and Complaints Department head Datuk Seri Michael Chong said the proposal by the Urban Wellbeing, Housing and Local Government Ministry must be carefully studied as it could be manipulated by certain quarters.

“The ministry must work with Bank Negara to properly regulate developers to ensure only the most credible and financially healthy companies are granted approvals to offer loans,” he said.

“Otherwise, developers would be no different from Ah Long who go around threatening people when they want their money back.”

Chong said both house buyers and developers must be honest for the system to work.

“House buyers should only take loans they can afford while developers must offer loans that would not burden consumers in the long run,” he said.

He said while the scheme would benefit first-time buyers who were unable to secure bank loans, developers must not exploit vulnerable borrowers.

Malaysian Punjabi Licensed Moneylender Association president Ba Beanat Singh Dhaliwal said the ministry must be transparent on how it planned to govern and regulate developers who obtained moneylending licences.

“Most moneylenders give out personal loans of between RM1,000 and RM50,000 and we do not offer loans for those who want to purchase homes,” he said.

“We expect little or no impact on our business if developers are allowed to give out loans only for property purchases.”

However, Ba Beanat said, the ministry must spell out the terms and conditions for developers to offer housing loans to ensure it did not affect other moneylenders.

He also said the proposed interest rates of between 12 and 18 per cent for housing loans may not be ideal as house buyers may find it difficult to service their loans.

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