Answer for Oral Question PL167

QUESTION

Yang Berhormat Dr. Awang Haji Mahali bin Haji Momin

YANG BERHORMAT DR. AWANG HAJI MAHALI BIN HAJI MOMIN asked the MENTERI EKONOMI, PERDAGANGAN DAN INDUSTRI to state how the Government ensures a balance between promoting access to financing and strengthening a culture of saving, so that the people can improve their financial resilience without becoming overly dependent on debt?

ANSWER

Yang Berhormat Menteri Ekonomi, Perdagangan dan Industri

The Government adopts a balanced approach by ensuring that the people have access to suitable and affordable financing, while encouraging saving habits and prudent financial management.

In terms of access to financing, the Government, through the Brunei Darussalam Central Bank (BDCB), ensures that the financing market remains competitive and inclusive. Several controls on financing rates have been relaxed to allow financial institutions to offer rates based on the risk profile and credit standing of borrowers. At the same time, maximum rates are still set for several products commonly used by the public, such as credit cards, personal financing and vehicle financing, in order to protect consumers’ interests.

Such access to financing must be accompanied by responsible lending practices. The Total Debt Service Ratio (TDSR) regulations generally limit total monthly debt repayments to 60 per cent of a borrower’s net income. This is intended to ensure that borrowers still have sufficient income to meet their daily needs, build savings and cope with unexpected expenses.

However, these regulations also take into account the needs and circumstances of borrowers. Among other things, the TDSR limit may be increased to up to 70 per cent for the financing of the purchase or construction of residential homes. Certain sources of income, such as pensions, rental income and income from sole proprietorships, may also be considered in the affordability assessment, subject to the stipulated conditions. This approach helps to ensure that financing remains inclusive without disregarding borrowers’ ability to make repayments.

BDCB also requires financial institutions to conduct comprehensive assessments of customers’ affordability and to treat them fairly and transparently. The use of credit reports helps financial institutions make more objective assessments based on an individual’s financial commitments and payment records, thereby reducing the risk of borrowers taking on debt beyond their means.

With regard to Financial Literacy, this matter was also raised by YB Chong Chin Yee during the 21st Legislative Session, first meeting, in March 2025. At the same time, efforts to strengthen the culture of saving continue to receive attention at all levels, while the approach is also being reinforced at the grassroots level, in line with the National Youth Policy Goals and Strategy 2020/2035, namely to nurture holistic and visionary youth in all aspects.

In its efforts to promote a culture of saving, BDCB has set a minimum return rate for ordinary savings accounts at no less than 0.15 per cent per annum. Financial institutions also offer various savings and investment products with different tenures, returns and levels of risk. Therefore, the public is encouraged to compare and select products that are suitable for their respective financial goals.

These regulatory efforts are also supported by ongoing initiatives to improve the level of financial literacy in society. Through educational programmes, awareness campaigns and the provision of various information resources, BDCB, together with the National Financial Literacy Council, assists the public in developing more prudent financial habits, including managing debt, planning savings and making more informed financial decisions.

Overall, the Government’s objective is not to restrict the people’s access to loans or financing, but to ensure that such facilities are provided responsibly, in line with borrowers’ means and used for productive purposes.