According to CEIC data, Malaysia Number of Bankruptcies data was reported at 342.000 Unit in Dec 2022.
As of March 2022, 287,411 Malaysians have been declared bankrupt, with most being young working adults(2). Nearly 60% of the 46,132 Malaysians who declared bankruptcy from 2018 to May this year were aged between 25 and 44(3).
There are many reasons why you may be facing financial difficulty.
According to a survey conducted by CompareHero, one out of three Malaysians are not comfortable with their financial knowledge, while half of the population (52%) say they face difficulties raising even RM1,000 for emergencies. The main reason why many of them were unable to save was the high cost of living.
The data on financial problems faced by Malaysians is concerning. Statistics from the Malaysian Department of Insolvency showed over 95,000 individuals have been declared bankrupt between 2014 and 2018 after failing to honour their borrowings with lenders. According to Credit Counselling and Debt Management Agency (AKPK), 943,181 individuals sought help from AKPK between 2006 and 2018.
Already younger Malaysians face more obstacles in terms of housing affordability, higher debt levels, lower wages, and a decline in inter-generational social mobility. This shows that many Malaysians do not save enough for rainy days. A Cent-GPS online survey shows that 30% of respondents have no income during the MCO, while almost 30% say their savings can only last them a month and 44% one to three months. Many Malaysians are poor in financial management and have insufficient savings to see them through a crisis.
If you have taken out loans and struggling to pay them, there are consequences.
You can also be barred from leaving the country besides losing your assets and being sued.
If you’re struggling to pay off your loans, you can contact your bank to apply for loan repayment assistance.
Here are some banks that offer loan repayment assistance in Malaysia:
- Affin Bank & Affin Islamic Bank
- Alliance Islamic Bank
- Bank Islam
- Bank Mualamat
- Bank Rakyat
- Bank Simpanan Nasional
- CIMB Bank & CIMB Islamic Bank
- Hong Leong Bank & Hong Leong Islamic Bank
- HSBC Amanah Malaysia Berhad
- Maybank & Maybank Islamic Berhad
- OCBC Bank & OCBC Al-Amin Bank Berhad
- Public Bank & Public Islamic Bank Berhad
- RHB Bank & RHB Islamic Bank Berhad12.
Visit your bank’s website to find out how to apply via web form, email, or phone call. Fill in your personal and financing details. Tick the boxes on the terms of the repayment assistance. Your bank will process your application within 5 calendar days (for individuals) or 14 calendar days (for microenterprises and SMEs).
There are several places you can go to get financial help legally in Malaysia. Here are some options:
- AKPK (Agensi Kaunseling dan Pengurusan Kredit) – AKPK provides free financial education and counselling services to individuals as well as debt management programmes for those who are struggling with debt.
The three main services that AKPK provides include:
- Financial education on the responsible use of money and credit management skills.
- Counselling and advice on financial management.
- Debt management programme to assist consumers to regain financial control.
Besides being known for their Debt Management Programme (DMP), AKPK also provides financial education and financial counselling sessions to Malaysians. All of these services are available for FREE to individuals.
As a word of caution: If you are approached by any parties claiming to be “third-party agents of AKPK”, DO NOT engage nor solicit any advice from them. AKPK does not charge fees for consultancy services nor do they have any agents.
They offer financial counselling, in particular to those experiencing high debt problems or facing financial issues because of debt. They will meet a counsellor, and if they are suitable, AKPK will put them in their Debt Management Programme – where they will negotiate with the financier to get a restructured repayment plan which is affordable for the borrower.
Individuals will have a one-to-one session with an AKPK officer where they will calculate their financial commitments and then proceed to work out a restructuring plan.
To further illustrate this, here is an example:
Let’s say a person has five credit cards and owes a total of RM50,000 – the first thing that he’ll have to do under AKPK’s programme is to terminate the cards. The cards will then be converted to a term loan, and the tenure will be extended and the monthly payment will be reduced to according to how much the person can afford, as well as based on the approval of the financial institution.
The borrower will then be required to only do one payment through AKPK, who will distribute the payments accordingly. After that, AKPK will monitor him to ensure he progresses well.
AKPK will negotiate with banks on behalf of borrowers, and upon agreement from both the borrower and the bank, a DMP confirmation letter will be issued by AKPK.
Basic requirements for you to enrol to the DMP programme are:
- The individual has not been declared bankrupt.
- Is not in an advanced stage of litigation with banks.
- Has sufficient net disposable income after meeting one’s expenses.
- Has debt not amounting to more than RM5 million.
Read more about the DMP here and to apply for this programme, first fill-up the online application form for the Debt Management programme.
While under the AKPK programme, all legal actions against the client will be deferred or abeyed (moral suasion), hence giving clients a peace of mind to complete and settle their debts, without being “harassed” by collection agencies. Should there be a default in repayment, the financial institutions will continue to recover their debts.
According to AKPK, those aged between 30 to 40 years make up 130,616 or the bulk of their applicants, followed by those aged 40 to 50 years (89,808), 20 to 30 years (43,336) and 50 to 60 years (41,072). Those aged 60 and above make up the least of all the age groups, filling up only 10,799 or 3.4% of the entire participants in the programme.
Borrowers just need to visit AKPK’s website www.akpk.org.my to book a date with AKPK’s counsellor.
AKPK has a total of 11 branches across Malaysia, to find the nearest to you click here or you can call the AKPK Infoline at 03-2616 7766.
2. Government of Malaysia – The government of Malaysia provides welfare aid to Malaysian citizens such as applying for financial assistance, welfare institutions, support services, retirement facilities and funeral expenses management.
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