THE strict corporate governance framework adopted by most financial institutions is one of the contributing factors that resulted in the billions of ringgit in affordable houses remaining unsold.An economic expert said although corporate governance was complied with to protect financial institutions, rigorous practices might hinder aspiring homebuyers from obtaining housing loans.
Associate Professor Dr Aimi Zulhazmi Abdul Rashid said stringent requirements imposed by banks in providing such loans were designed to comply with regulations set by the authorities.The framework, however, did not help in the approval of housing loans.
“Houses are built according to cost of development and profit margin with little regard to the targeted market requirement and capability to borrow from the banks.
“This explains why there is a high number of unsold units (of affordable homes).
Media Title: New Straits Times
Date: 27 Oct 2018