Saturday 02 Dec 2023
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KUALA LUMPUR (June 26): High cost of living and weak financial planning are the main causes of loan repayment failure among Malaysians, according to Deputy Finance Minister Datuk Seri Ahmad Maslan.

At a press conference after visiting the headquarters of the Credit Counselling and Debt Management Agency (AKPK) here on Monday (June 26), he said that statistics of the central bank's agency, established in 2006, showed that as at end-February 2023, 38.9% of its Debt Management Programme (DMP) participants were troubled by high cost of living, followed by 36% due to weak financial planning.

Business failure (11%), loss of income (8.8%) and high medical cost (4.9%) are also among the factors that drove participants to apply for the programme.

Among the 389,747 participants, the majority or 41.8% were aged 30 to 39, followed by 40-49 (28.3%), 20-29 (13.3%), 50-59 (12.9%), and those above 60 (3.7%).

Those who were married made up 77% of the participants, while 15.8% were single; 5.4% were divorced and 1.8% were widowed.

Income-wise, 32.1% of the DMP participants earned less than RM24,000 a year, followed by those making RM24,000 to RM35,999 (20.9%) per annum, RM36,000 to RM47,999 (16.2%), RM48,000 to RM59,999 (11.1%), RM60,000 to RM71,999 (2.1%), RM72,000 to RM95,999 (1.5%), RM96,000 to RM119,999  (13.1%), and those earning above RM120,000 (3%).

The programme aims to assist individuals to regain financial control through the provision of a personalised debt repayment plan for individuals who are unable to manage their monthly repayments to banks.

Since its inception in 2006 up to Feb 28 this year, 1.2 million individuals have received AKPK’s counselling services. Of that, 420,000 participants have applied to enrol into DMP, with 47,000 participants successfully settling arrears totalling RM2.5 billion.

Edited ByTan Choe Choe
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