KUALA LUMPUR: Imagine getting a loan for tens of thousands of ringgit in under an hour with no monthly repayments.

The only requirement is that you are between 53 and 55 years old and have money in your Employees' Provident Fund (EPF) account.

That is where the repayment for the loan will come from.

This is the pitch some so-called community credit company agents are making on social media to prospective customers.

Borrowers only need to provide their EPF statement to the "agents" of the community credit companies to determine how much money can be loaned.

Once a borrower is eligible to withdraw their retirement savings from their EPF Account 1, they must repay their loan lump sum with interest.

One agent who spoke to Harian Metro said borrowers would be charged interest rates of at least five per cent of the loan.

The interest rate can be higher depending on the amount of money loaned and the amount of time needed for a borrower to be eligible to withdraw their savings.

"The only documents needed are a photocopy of your (borrower) MyKad and their latest EPF statement," the agent told this reporter who called as a prospective borrower.

"No payment is needed until you (borrower) can withdraw their EPF money."

According to the agent, the scheme has been around for a while and his company was registered and even has an office.

Asked if the company was carrying out illegal moneylending services, the agent insisted his company was legitimate.

The agent said they would only loan money based on the borrower's savings in their Account 1 and will not touch funds held by EPF.

When asked about details for the loan repayment, the agent said borrowers only need to sign "several documents" but declined to provide specific information.

Meanwhile, an EPF spokesman said the retirement fund has never endorsed such schemes.

"We are always monitoring for scams or third parties trying to advantage of EPF members."

The spokesman said EPF is constantly raising awareness and reminding its members against such scams.

EPF, the spokesman added, actively reports advertisements of such scams to the Malaysian Communications and Multimedia Commission.

The public is urged to refer to EPF for verified information.

https://www.nst.com.my/news/nation/2024/07/1079897/epf-savings-being-mortgaged-retirement