KUALA LUMPUR (Aug 15): Bank Negara Malaysia (BNM) said it is monitoring “very closely” the elevated household debt level even as the loans are being dished out prudently and paid on time.
Household debt “is something that we need to manage”, said BNM governor Datuk Seri Abdul Rasheed Ghaffour during the question-and-answer session at a press conference after release of the country’s second-quarter economic data.
The central bank however is taking comfort in an improvement in the debt service ratio, the proportion of income used to repay loans, while banks are “using prudent loan approval processes”, he said.
Impairments, meanwhile, are just 1.1% of the total household debt, Abdul Rasheed noted.
Malaysians have racked up RM1.65 trillion in household debts as of end-March 2025, latest data showed. At nearly 83% of gross domestic product, Malaysia’s household debt is among the highest in Asia.
The debts, however, are backed by assets more than twice as large at RM3.45 trillion, according to Deputy Finance Minister Lim Hui Ying in Parliament on Wednesday. More than 61% of household debts comprised loans for the purchase of residential properties, she added.