The Provident Fund Second Account Support Tool Scheme (FSA2) has been open for applications since the 7th of this month, and as of yesterday, a total of 59,230 people have applied for loans to the fund, but only 27,705 were eligible. The FSA2 facility allows Provident Fund Board members to obtain loans from financial institutions by pledging their deposits as collateral.
The eligibility criteria for FSA2 require applicants to be over 40 years old and have a deposit of at least RM3,000 in their second account. The maximum loan amount is RM50,000, which can be amortized within 10 years, with an interest rate ranging between 4 and 5%.
As of now, the two banks participating in FSA2 are Malaysia Building and Development Bank (MBSB) Bank and Bank Negara Nasional (BSN). The FSA2 scheme only allows the withdrawal of deposits from the second account for five purposes, namely buying a house, education, health, specific insurance plans, and RM3,000 for the pilgrimage portion.
Dato’ Seri Ahmad Maslan, deputy minister of the Ministry of Finance, has stated that the government firmly refuses to approve the withdrawal of provident fund deposits and only approves the withdrawal of deposits from the second account for the above-mentioned five purposes.
MP Datuk Seri Johari suggested that it is easier to allow members to withdraw their deposits than to pledge their deposits to apply for a loan. However, Ahmad Maslan clarified that the savings in the first account are not allowed to be used and are only for retirement purposes.
Meanwhile, Ahmad Maslan has also mentioned that as of December 31 last year, the total assets and liabilities of the federal government’s integrated financial management and accounting system amounted to RM2.85 trillion. The National Accounting Bureau is still exploring and looking for assets of the federal government, and this year, there may be another RM30 billion in assets, most of which are in the country.
The FSA2 scheme has received an overwhelming response from the public, with 60,000 applications received, indicating the pressing need for financial assistance. However, only 27,000 applicants were eligible for the loan. As the pandemic continues to ravage the economy, more Malaysians may turn to the FSA2 facility for financial support. The government needs to review the eligibility criteria and consider easing restrictions to provide greater financial assistance to those in need.