Malaysia’s government is turning to the wealth of the masses, instead of reticent banks, to help solve a $4.8 billion property overhang.
Property crowdfunding offers an alternative for home buyers, Finance Minister Lim Guan Eng said on Friday, after he warned banks that he may take action against them for rejecting housing loan applications without reason.
“But if the banks refuse to lend, it will be not only just an option,” he said in Kuala Lumpur.
“It may be more than that.”
The crowdfunding model lets Malaysians bypass banks for loans and connect directly with investors.
Together, equity crowdfunding and peer-to-peer platforms have so far raised 350 million ringgit ($84 million) for small businesses, with more than half of the 11,261 investors being younger than 35 years old, according to the Securities Commission.
The SC set out guidelines for property crowdfunding on Friday and urged those interested in setting up such a platform to call them.
Lim expects fintech to help address the gap between the glut in property supply and a lack of affordable homes.
The government has pushed for discounts and waived stamp duty fees for first-time buyers, but he remains unhappy with the banks’ role.
Loans disbursed to buy residential property shrunk 5% in the first quarter from a year ago, according to central bank data.
“I hope when I keep publicly asking the banks to lend more, they do not have a counter reaction by restricting loan lending,” Lim said.
“This is something that the government will not be happy about,” adding that he is looking into whether it can roll out incentives for fintech as soon as in the 2020 state budget.