Article from The Star dated 12 February 2014
KUALA LUMPUR: Malaysians are taking up more loans than they can afford with their salaries, says Credit Counselling and Debt Management Agency's (AKPK) chairman Datuk Mohd Hanif Sher.
According to AKPK statistics, as of Dec 31, last year 62,818 individuals with a total debt of RM4.5bil have been registered under the agency’s Debt Management Programme (DMP).
In light of the increasing number of bankrupt individuals annually, Minister in the Prime Minister's Department Nancy Shukri said financially strapped Malaysians should enrol in the DMP to prevent the number of bankrupts from rising in the country.
Shukri said the ministry through the Malaysia Department if Insolvency (MdI) will be going "all out" to conduct joint-awareness programmes with AKPK throughout the nation.
"Many people are not aware of the AKPK's role and function. Getting individuals who have incurred debts of up to RM2mil and below to sign up for the debt management programme will enable the Insolvency Department to reduce bankruptcy by accelerating discharge," she said after visiting the agency's headquarters at the Maju Tower here on Tuesday.
According to statistics from MdI, 13,238 people were categorised as bankrupt in 2007, 13,855 in 2008, 16,228 in 2009, 18,119 in 2010, 19,167 in 2011 and 19,575 in 2012, with those in the private sector or doing business forming the highest percentage.
Mohd Hanif said 22.8% of the individuals who have enrolled in the agency's Debt Management Programme (DMP) cited poor financial planning as a cause for defaulting on their loans.
"Individuals seeking financial management services from us have cited this as the main cause for defaulting their loans," he said.
Other factors with high percentages include high medical expenses and business failures which contributed 18.1% and 15.3% respectively.