Tuesday, August 20, 2013

Putrajaya aborts plan to put PTPTN defaulters on bad credit list

Putrajaya agreed today to shelve the proposal to list PTPTN defaulters on Bank Negara’s bad credit list, bowing to widespread criticisms that the move would only add further strain on the livelihoods of Malaysia’s young graduates.

Youth and Sports Minister Khairy Jamaluddin confirmed the decision via his Facebook and Twitter accounts, saying Cabinet rejected the proposal during its weekly meeting this morning.

“Baru selesai mesyuarat Jemaah Menteri. Alhamdulillah, PTPTN tidak akan meneruskan cadangan untuk menyenaraikan peminjam dibawah CCRIS. Terima kasih pada PM & Menteri-menteri Pendidikan kerana mendengar suara-suara orang muda,” he wrote on Facebook.

[Translation: Just finished Cabinet meeting. Alhamdulillah, PTPTN will not proceed with the proposal to list borrowers on CCRIS. Thank you to PM and the ministers of Education for listening to the voices of the youths.]

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It immediately earned criticisms from politicians across the divide, including Khairy himself.

The Umno Youth chief said yesterday that the party wing disagreed with the public-shaming exercise of listing defaulters on the CCRIS, and urged the federal government to try other credit collection mechanisms to recover loan funds.

The CCRIS is where information on borrowers to the Credit Bureau are stored. Credit data from financial institutions is automatically kept and processed in the CCRIS and subsequently synthesised into credit reports, which will in turn be made available to institutions upon request.

An individual with a bad credit report would automatically face trouble when applying for future loans with these institutions.

“The government could use other existing measures to take action against defaulters who had stubbornly refused to pay up despite notices being issued to them,” Khairy said in a statement yesterday.

He added that priority should be given to an integrated approach that includes introducing incentives for those who pay up and a flexible payment system that takes into consideration the borrowers’ financial situation.

“This is because PTPTN loan is different from other credit facilities such as credit card or hire purchase which are loans taken out of personal choice while PTPTN is a necessity for students,” he said.

Pakatan Rakyat (PR) leaders also criticised the move yesterday, even threatening to kick off a nationwide protest campaign if Putrajaya does not shelve its plans.

PKR strategy director Rafizi Ramli, one of the brains behind PR’s famous free education pre-polls promise, said this move would not work.

“Before this, PTPTN decided to place defaulters on an immigration blacklist to block them from leaving the country.

“This threat did not even help improve the fund’s financial position in terms of loan collection... so I am confident that listing defaulters on the CCRIS would not be effective as well,” he said.

Earlier today, PR de facto leader Datuk Seri Anwar Ibrahim joined the chorus of criticisms and labelled the CCRIS listing plan a “further victimisation” of borrowers.

“It must be remembered that the central issue here is not merely how the government could facilitate the loan recovery.

“The issue is the failure of the UMNO-BN government in discharging their social justice responsibilities of providing free tertiary education particularly to the underprivileged,” he said in a short statement posted on his blog.

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