Malaysians cannot get auto loans easily but the economy is doing great! The banks have announced stricter guidelines in the dispersing of car loans, a double blow for the automobile sector already struggling to shore up sluggish auto sales. Financial institutions are obviously sufficiently worried about the state of this industry to instill a couple nmore layers of checks before doling out auto loans. All loan applications would now be subjected to a financial rating system based on Bank Negara’s Central Credit Reference Information System (CCRIS) and two private credit reference agencies – Credit Tip Off Service Sdn Bhd (CTOS) and Financial Information System (FIS) Sdn Bhd. CTOS and FIS provide details of the individual’s credit standing with other banks, while CCRIS tracks a borrower’s repayment patterns, spending patterns and habits, as well as his credit card and other electronic transaction records in the last 10 to 20 years.

The collective data will then assign a credit rating – an A rating will render the applicant automatic qualification for the loan; a B rating means the loan can be considered; C means the application will be rejected but the borrower can appeal to the bank; while D means the rejection is final. What is striking is that banks are only looking at applicants who get A ratings. If applicants with a B rating won't be considered, then the question must be asked; is the economy really in good shape? Can we really achieve the projected 5.8 percent GDP growth for this year? By the looks of it, the auto sector is going to have a very bad year. I wonder what the rest of the economy is going to be like come 2007.  ¶ 11:50 AM