Helping Debtors Get on Their Feet Again


An article by Inside Investor via dated 26 March 2012


Individual investors should put their money only into investment products they understand, that suit their risk appetite and are within their financial means. This is the advice of Koid Swee Lian, Chief Executive Officer of Agensi Kaunseling dan Pengurusan Kredit (AKPK) [or the Credit Counselling and Debt Management Agency], a wholly owned subsidiary of Bank Negara Malaysia (BNM), Malaysia’s central bank.


“Products with high returns are generally coupled with high risk. Investors must be wary of financial scams. If a product promises returns that are much quicker and higher than the market rate, it is probably too good to be true.”


“To be a financially capable consumer, one must have a financial plan which includes tracking all expenses and adequate savings. Borrowing should be done only for productive purposes, and when it is affordable,” said Koid.


AKPK was set up in 2006 to promote BNM’s efforts towards building a comprehensive consumer protection framework and to proactively ensure the financial sustainability and resilience of households in Malaysia. The agency, which offers its services to retail financial consumers free of charge, aims to promote financial wellness among Malaysians by empowering them to be financially savvy through consumer education, credit counselling, and debt management programmes.


According to Koid, Malaysians can seek AKPK’s assistance in rescheduling or restructuring their housing loans, hire-purchase loans and personal loans as well as outstanding credit or charge card debts from financial institutions under the purview of BNM. Additionally, AKPK’s Debt Management Programme (DMP), a personalised debt repayment plan for individual customers developed by the agency’s credit counsellors in consultation and agreement with lenders and financial service providers, can assist borrowers to work out repayment installments that enable them to meet their loan obligations and living expenses.


Besides, the agency currently sets its focus on financial education initiatives.


“It is important to have Malaysians educated and to tell them the ways to manage their financial matters properly. We have the POWER! Managing Your Debts Effectively programme targeting young adults. We hope to extend this financial education initiative to Malaysian adults from various backgrounds.


“We are doing this through co-operation with smart partners, and this programme is conducted in four languages, i.e. English, Bahasa Melayu, Mandarin and Tamil as well,” said Koid.


Apart from conducting programmes for individuals, AKPK is also offering its services to companies which are interested to educate their employees on effective personal financial management.


Koid said, “We found out that most employees who are bogged down by debts will have their work performance affected. So, I believe, employers who introduce AKPK’s financial education programmes to their employees will benefit from employees who are not financially distressed and hence, are more productive. Companies can invite AKPK to conduct financial education programmes for their employees. AKPK’s financial education programmes can help to elevate the employees’ financial capability as well as productivity and contribution to the company. It would be good for companies to have such initiatives.”


In addition, AKPK also provides counselling and advice on financial management, including financial budgeting to manage expenses.


She also said that there are many factors which lead Malaysian individuals towards bankruptcy. Some of these include borrowing excessively beyond their means, borrowing money for unnecessary consumption or unproductive purposes, lack of financial knowledge and discipline which lead to the inability to manage debts wisely, insufficient savings for emergencies, failed businesses, expensive bills and excessive purchases using credit cards.


As of January 2012, about 1,437 individuals with cumulated total debts of RM46.8 million have successfully completed AKPK’s debt management programme. About 175,090 individuals have attended its counselling services and 71,206 of them have enrolled into the DMP of AKPK.


AKPK’s statistics also show that most of its customers (77.24 per cent) are indebted with a combination of  housing loans, hire-purchase loans, and credit card debts. Additionally, 32 per cent of the DMP participants are Malaysians from the private sector, nine per cent are self-employed, and eight per cent belong to the public sector. The rest are either unemployed, retired, or did not disclose their occupations.


According to AKPK, individuals who have exited AKPK’s DMP are eligible to obtain new loans or funding. Their previous records will not hamper their chances in new loan or funding applications. They will receive the same treatment as any other loan applicant.


AKPK only offers its services to individuals who have not been declared bankrupt, are not in the midst of advanced litigation, have sufficient net disposable income, and have an aggregate debt size not exceeding RM2 million.


More information on AKPK may be obtained at