KUCHING: The best way to help people in dire need is by allowing the withdrawal of funds from the Employees Provident Fund (EPF) account 2.
According to Dr Shirly Wong Siew Ling, a lecturer at the Faculty of Economics and Business at Universiti Malaysia Sarawak (UNIMAS), allowing individuals to access their EPF funds could provide immediate financial relief for those in dire need.
“Although we are aware that the EPF funds were withdrawn during the previous Movement Control Order (MCO) period and the remaining balance may be small, the amount still available may help the people.
“At least they can use their own money to pay for all their needs without adding to their burden by borrowing from banks,” she told Suara Sarawak today.
Wong said the action could also help people avoid paying bank interest rates that would certainly burden them in the future.
“The money that should have been used to pay the interest can also be saved by the people for other purposes,” she said.
Meanwhile, she also suggested that the EPF could collaborate with commercial banks for fund withdrawal, but with lower interest rates while it was too early to evaluate the initiative as the actual implementation method has yet to be announced.
She added that the cooperation between the government, EPF, and bank is still uncertain on how it may benefit the people and it will certainly come with pros and cons.
As such, she advised the people to wait for the actual method and mechanism to be announced later.
“It is hoped that it will bring benefits and at least we know that the government has tried its best to help those in need,” she said.
However, Joanne Shaza Janang expressed concern that using EPF savings as collateral for bank loans could lead to long-term financial problems for contributors.
According to the lecturer at the Faculty of Economics and Business at UNIMAS, the main purpose of EPF savings was for retirement.
“EPF savings are intended for retirement and that spending them now could deplete future savings and cause social issues.
“In my opinion, this should be the last option because the main objective of EPF savings is for retirement. If we spend the money now, it is considered as personal loans, and we will have a shortage of savings for future use, which could lead to social problems later on.
“However, I personally agree with the proposal because there are still some individuals out there who may be facing financial problems, especially those affected by the COVID-19 pandemic,” she said.
She told Suara Sarawak yesterday that this was part of the government’s initiative to help the public maintain their financial stability.
“My principle is that EPF savings are for retirement, and even during the pandemic, we were given the flexibility, but countries that have implemented similar measures have already cancelled them,” she said.
Despite the pros and cons of the proposal, there is hope that the government’s efforts will provide some relief to those struggling during these challenging times.
Prime Minister Datuk Seri Anwar Ibrahim had announced this week that the government was considering allowing EPF contributors to use their contributions as collateral for financial financing.
The plan is designed to assist those in need of financial loans during the pandemic.
