BNM launches advisory service for rejected financing applicants

MyKNP initiative will increase the awareness and credibility of financial users


BANK Negara Malaysia (BNM) has launched Khidmat Nasihat Pembiayaan (MyKNP), an advisory service aimed at providing greater understanding of the factors affecting one’s financing application as well as helping in raising applicants’ eligibility for future financing.

The service is a joint collaboration with Credit Guarantee Corp Malaysia Bhd (CGC) and Credit Counselling and Debt Management Agency (AKPK), with the support of the financial industry.

BNM governor Datuk Nor Shamsiah Mohd Yunus (picture) said MyKNP is a one-stop centre that offers advisory services and steps that can be taken to raise one’s eligibility for loans, as well as increase awareness on alternative and more suitable financing methods.

“It is hoped that the MyKNP initiative will increase the awareness and credibility of financial users by narrowing the unsymmetrical information gap between users and financial institutions,” she said in her speech at the launching ceremony in Kuala Lumpur yesterday.

Applicants who have been unsuccessful in securing small and medium enterprises (SMEs) financing or home financing can contact MyKNP at CGC and AKPK respectively to obtain free advisory services.

These advisory services include further clarification on the reasons for rejection by financial institutions, advice on how to improve eligibility for financing in the future, and information on alternative financing (for SMEs) or alternative solutions (for homebuyers).

BNM assistant governor Adnan Zaylani Mohamad Zahid said the central bank “recognises that there are challenges faced in the current environment whereby financing is becoming more of a concern”.

“There’s a growing number of feedback we have seen, not just from businesses but also from our own officers, that businesses and individuals do face a lack of information and awareness of what is out there to help them.

“When they get one rejection from a financial institution, they tend to generalise and say the whole system is not working for them.

“So, with this initiative, we are hoping to showcase that there is a very big ecosystem that can help prospective borrowers (and) increase chances of getting financing. It’s about creating further awareness about what already exists out there,” he told reporters after the launch ceremony.

He added that banks are now required to provide a reason when rejecting financing applicants.

“We issued a letter to the CEOs (of the banks) in June. All rejections must be accompanied by an explanation for the basis of the rejection,” he said.

Meanwhile, the central bank has also revised the eligibility criteria for its RM1 billion Fund for Affordable Homes, which aims to help lower income homebuyers finance the purchase of their first homes.

Effective Sept 1, 2019, the maximum monthly household income is now increased to RM4,360 from RM2,300 previously.

The maximum property price has also been doubled to RM300,000 from the previous limit of RM150,000.

According to Adnan Zaylani, 296 applications worth RM31 million have been approved under the fund as at the end of June, 2019.

The fund was made available from Jan 2 for two years or until the RM1 billion allocation is fully utilised.

A total of 700 applications were received during the first six months of the year, of which, 390 have been processed and 296 were approved, setting the approval rate at 76%. Ninety-four applications were rejected due to affordability issues.

“When we first set up the fund, it was about reaching people at the margin of affordability.

“It was to help people with income of RM2,300 to buy houses worth up to RM150,000, so we’re talking about a very small segment of prospective house buyers. So, this (revision) would raise the utilisation (of the fund),” Adnan Zaylani said.