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As part of the government’s willingness to explore new, technology-enabled and innovative mechanisms, it will be approving private sector-driven “Property Crowdfunding” platforms to serve as an alternative source of financing for first-time house buyers.
The Securities Commission will regulate these exchange platforms under the peer-to-peer (P2P) financing framework.
Under the P2P financing framework, the buyer will be able to acquire a selected property with 20% of the price of the premises. The remaining 80% will be borne by potential investors who fund the purchase in exchange for its potential appreciation in value over a particular period of time.
However there has been controversy surrounding the scheme, with some online comments even comparing it to the gold scams like JJPTR. The House Buyers Association (HBA) recently criticised the move, saying that the real problem was high house prices and not financing options.
HBA expressed concern on growing property speculation, property scams and bad debts, saying the Government would be providing buyers with a weak credit score access to “easy credits” with the P2P scheme.
The association also pointed out that the Government was unclear as to whether the crowdfunding initiative was for properties that were under construction or completed units.
The government has responded by stating that the full guidelines on the peer-to-peer (P2P) financing framework for property ownership will be announced in the next one to two weeks, said Deputy Housing and Local Government Minister Datuk Raja Kamarul Bahrin Shah Raja Ahmad.
He said the government was committed to opening up house ownership for Malaysians by looking at ways to ease financing needs. “Anything that is new is bound to have details that need to be ironed out. At the moment, we have not quite worked out the full mechanism yet.”
I hope they get the implementation for this spot on, or else I think this could end up turning into something dangerous—especially if you allow those with really poor credit ratings to own homes so easily.
After carefully studying the P2P housing scheme, it’s very reliant on the property’s value after the 5 years are up. Both homeowners and investors could be taking a risk as property prices are currently unstable.
Image Credit: Flickr/ Mohd Fazlin
Government Pumps In RM60.2 Bil To Improve M’sia’s Education Sector
A total of RM60.2 billion have been allocated to the Education Ministry next year, making it the largest recipient of funds in the 2019 Budget. Finance Minister Lim Guan Eng also said RM2.9 billion would be spent on food, text books and cash assistance for the poor.
Lim also said a total of RM100 million will be allocated to rebuild all dilapidated schools nationwide. He added, “RM206 million will be allocated to develop and prepare training programmes at polytechnics and community colleges.”
The government will set up a Technical Vocational Education and Training fund to create a more competitive environment as well as training programmes to fulfil the industry’s needs, which are great to say the least.
“A total of RM30 million has been allocated to this fund. Another RM20 million allocation will be used to increase the competency among the youth via the TVET Bootcamp Programme.”
On the other hand, our ex-prime minister, Najib has actually posted on Facebook claiming that the education budget announced by him was better. Big surprise, there.
I’ll tell anyone who’ll listen that education is the glue that holds society together, but people seem to focus on everything else instead. So I’m genuinely pleased that the Education Ministry is being given the highest priority for the 2019 Budget—if the funds are used well, this could be the first step in our society moving forward.
Image Credit: PTPTN
PTPTN U-Turn Shocks Privilleged Students As They Can’t Get Free Money Anymore
In another twist of events, there will be no more discounts for National Higher Education Fund Corporation (PTPTN) borrowers who fully settle their loans or through salary deductions.
In the previous budget, the government extended discounts of 20% on the outstanding debt for a full settlement; 10% for repayment of at least 50% on the outstanding debt made in a single payment; and 10% for repayment through salary deductions or scheduled direct debit. These discounts are only available until Dec 31 this year.
Furthermore, Finance Minister Lim Guan Eng said there will be an option to repay the loans through deductions of between 2% and 15% from the borrower’s salary, based on their monthly income rate. This system will only be applicable to borrowers earning more than RM1,000 a month.
The biggest uproar from students came after it was announced that discounts on the loan will only be given to students from B40 households who have successfully obtained first class honours in their studies instead of waiving the full loan to all first-class recipients.
In the first place, it was always a loan. There’s a general sense of entitlement that the previous government helped to foster, with all the “discounts” they give on things that are supposed to be paid back, like fines etc. The B40 are the ones who need it the most, and the deductions seem very fair based on the rates showed.
Image Credit: Unsplash/ rawpixel
Netizens Go Crazy On Social Media As Service Tax On Their Favourite Digital Services Announced
The Malaysian Finance Ministry (MOF) has announced the implementation of service tax on foreign digital services which includes software, music, video and digital advertising—effective Jan 1, 2020.
It is speculated that music streaming service Spotify, video streaming site Netflix and game distribution platform Steam will be included in the list as their logos were shown during Finance Minister Lim Guan Eng’s presentation.
This didn’t sit well with netizens as there were plenty of people complaining that their favourite digital services will cost more.
Foreign online services operating locally will now be required to register with the Customs Department for the relevant service taxes, says Finance Ministry’s National Budget Office director Johan Mahmood Merican.
According to him, the new tax on foreign online services, which has been slammed by various quarters, was to ensure a “level playing field” with local online services.
I’m not sure how much these services will be taxed but I’m sure consumers will be the one who must pay for it in the end. Do expect your services to cost maybe an extra RM5 per month on top of whatever charges you’re paying now. Remember, this doesn’t just affect these 3 services but all digital services too.
Image Credit: Unsplash/ rawpixel
Government Allocates RM2 Bil To Match Grants For VC’s To Spur Investments
The government has allocated RM2 billion in matching grants for private equity and venture capital players to be invested in strategic sectors.
Additionally, a Co-Investment Fund of RM50 million will be established for the government to invest with the private sector on alternative fundraising platforms such as crowdfunding and peer-to-peer (P2P) lending platforms, said Finance Minister Lim Guan Eng.
“In order to ensure the funds are only channeled to high-potential companies, matching grants from the government will only be given to firms that can attract private investment,” he said in his Budget 2019 speech in Parliament today.
Guan Eng pointed out that some RM170 million in funds have already been raised for 450 companies under various P2P platforms approved by the Securities Commission Malaysia so far.
“Almost 10,000 individuals have invested in these alternative fundraising platforms, of which 45% consist of youths aged below 35 years of age,” he added.
From I what I noticed, 2018 was a pretty healthy year for startup funding, and I can only see a lot more positives from more money going into the local VC ecosystem. Already we’ve seen some very interesting ideas pop up from amongst our local players and with more fiscal runway to go on, the future looks exciting!
Feature Image Credit: PropertyHartanah