Earlier it was reported that Youth and Sports Minister Hannah Yeoh said bankruptcy is the most serious problem plaguing the youth today, and not drug abuse. ― Reuters pic
KUALA LUMPUR, Oct 26 — The Malaysian Consumer and Borrower Settlement Association (4PM) receives complaints from about 15 bankrupt youths every day, a trend they say is critical and requires intervention from the government.
Advertisement
4PM’s statistics from 2019 to August this year also show that the highest number of bankrupt individuals are between the ages of 35 and 44 years, with a total of 13,757 people, followed by those aged 55 and above (5,549 people).
Malay daily Utusan Malaysia reported that of the 35,714 bankruptcy cases for the year 2019 up to August this year, personal loan cases comprised almost half of the total at 49.14 per cent (17,550 cases) compared to other types of financial loans, including secured or unsecured loans from banking institutions.
According to the report, business loans recorded the second highest bankruptcy cases with 17.30 per cent (6,179 cases), followed by vehicle hire purchases (3,898 cases), housing loans (2,978 cases) and credit card (2,198 cases).
Advertisement
4PM, a non-governmental organiation (NGO) that deals with banking, credit and civil problems, said that the government should take immediate action to ensure that borrowers, especially the youth, do not face bankruptcy problems which will ultimately affect their future.
“The government should give or make it easier for borrowers, especially the youth group, by instructing the banks not to be too strict with this group.
“We are willing to act as a mediator between the community and the bank. But the government needs to instruct the banks to cooperate,” 4PM president Rosland Mohd Arif was quoted saying.
Advertisement
He said the problem will get worse if no intervention was taken as most of the bankrupt youth were not in trouble because of a “luxurious lifestyle” but because of the increase in the amount of commitments that needed to be paid which is over the amount that they can afford.
“I interviewed every one of the bankrupt youths; one of the factors is that they are unable to pay their commitments. That is due to the increase in loan payments, for example, the house loan they used to only pay RM800 but now it has increased to RM1,200, and the salary remains the same.
“This has not been mixed with other monthly commitments such as cars, eating and drinking and so on,” he was reported saying.
Earlier it was reported that Youth and Sports Minister Hannah Yeoh said bankruptcy is the most serious problem plaguing the youth today, and not drug abuse.
The Insolvency Department statistics previously revealed a total of 5,695 bankruptcy cases throughout the past year, including 419 individuals aged 25 to 34, the majority of whom are employed.
She said the government has various short-term and long-term approaches to deal with the issue of bankruptcy among the people, especially the youth under the Institute of Leadership Development and Excellence (i-LEAD), such as providing modules and special programs related to financial literacy specifically for the youth.
“The government wants to apply financial knowledge and nurture youth with a high level of advocacy and financial literacy in order to prevent them from getting stuck in bankruptcy.
“This program will target the youth group that is most at risk,” she was quoted saying by the Malay daily.