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Banks will loan, they just want to manage their risks

I think there has been some misconception about the banks in Malaysia. Most young people I asked would tell me that there’s no way they could get their loans approved. It seems like the bank is unwilling to lend. Their reasoning, ‘The rejection of home loans are so high!’ By the way, the banks are in the business of LENDING money. They do invest some of the funds deposited with them but when they stop lending, they stop having profits.

Are banks doing well?

Earlier article here:

Banks’ latest results Perhaps some of these young Malaysians should also look at how they are spending their salaries instead and they may find the real answers why banks are not lending to them.

Statistically, take a look at the image from

I do hope everyone noticed that the approval rates for property purchasers in Kuala Lumpur is

as high as 85.2 percent (properties below RM250k) to as low as 73.2 percent (properties above RM500k).

This may also mean that some Malaysians are really stretching the limits of what they could afford in the hope of buying their ‘BEST’ home today and not thinking of upgrading in the future. Perhaps a better strategy is to get that loan approved and that meant buying a property well within our affordability and stop the bubble from building.

This advice came from our ex-BNM governor Tan Sri Zeti Aziz by the way. Read here.

For those buying properties in Selangor, the image on the right shows the approval rates for the different property price ranges.

It’s as high as 71.7 percent for RM250k properties or lower and as low as 70.6 percent for properties above RM500k.

If I am the CEO of a bank in Malaysia, I will always lend as long as my risks are managed.

If a property is already overpriced based on the opinion of my in-house valuer, I will decide to only lend based on 80 percent of the house price or lower instead of the 90 percent because I need to manage my risks too.

When we look at the auction market these days, we could see that sometimes, even when the property price is 20 percent below the market, it does not mean that there are ready buyers.

(Yes, I am a licensed auctioneer and I do follow some of the auction events in Malaysia). Happy borrowing within our means and the banks will lend to us.

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written on 22 Jan 2019

Next suggested article: You can’t take your money with you when you die

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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