Islamic banks pledge continued financing for affordable housing

KUALA LUMPUR: The Association of Islamic Banking Institutions Malaysia (AIBIM) has reaffirmed that Islamic banking institutions will continue to provide home financing facilities to eligible customers through various financing schemes offered by its members, in response to recent media reports on calls to relax the criteria for affordable home financing.
AIBIM president Datuk Mohd Redza Shah Abdul Wahid said Islamic banking institutions have been providing financing to ensure customers have continuous access to home financing.
“As at May 2017, a total of RM14.25 billion has been approved by the Islamic banks for the purchase of residential properties. This represented 37.3% of the total Islamic financing amounted to RM38.2 billion,” said Mohd Redza.
Islamic banking institutions offer various types of home financing products to cater to different needs of specific market segments, such as government servants, nurses and members of the armed forces; rural and urban lower income groups; and young urban adults. The products are offered based on various syariah contracts, namely Tawarruq, Musyarakah Mutanaqisah and Murabahah.
Mohd Redza said the responsible financing guidelines are in place to protect the interests of home purchasers who are extended the financing by ensuring that they have the capacity to honour their financial obligations. This is to ensure that these customers do not fall into financial hardship in the future.
AIBIM strongly advises all potential house buyers to approach the banks for any financing advisory assistance.
Last week, the Association of Banks Malaysia (ABM) said more than RM25.7 billion in loans have been approved by commercial banks in Malaysia from January to May this year, with loans in excess of RM24.6 billion disbursed for the purchase of residential property.
ABM reiterated that its member banks, which comprise the commercial banks operating in Malaysia, have been and will continue to provide home loans to eligible borrowers. – Bernama