A TOTAL of 53,000 individuals under the age of 30 are burdened with debts totalling RM1.9 billion, reported the Credit Counselling and Debt Management Agency (AKPK).
Bernama quoted Finance Minister II Datuk Seri Amir Hamzah Azizan saying that AKPK also found that 28 per cent of Malaysian working adults have borrowed money to purchase essential goods.
He also expressed concern over the easy access to personal loans, credit cards, and especially ‘Buy Now, Pay Later’ schemes, especially among young adults.
"While these may offer convenience, a lack of understanding of their implications and a lack of discipline in managing commitments can quickly lead to unmanageable debts,” he said.
Speaking at the launch of the Financial Literacy Month 2024 in Kuala Lumpur, he said the Organisation for Economic Cooperation and Development (OECD) financial literacy survey revealed that only 36 per cent of Malaysians understand basic financial concepts such as interest rates, inflation and risk diversification.
"This figure falls below the global average of 42 per cent, positioning Malaysia 26th out of 39 countries surveyed.
"The low level of financial literacy is concerning, particularly given Malaysia’s high household debt," he said.
As of 2023, Amir Hamzah said household debt had reached RM1.53 trillion, equivalent to 84.2 per cent of gross domestic product, one of the highest ratios in the region.
If not carefully managed, he said such levels of debt can lead to long-term financial strain.
"Financial literacy is fundamental to the economic empowerment and financial well-being of all Malaysians, making it a central pillar of the Madani economic framework.
“The government, through the Financial Education Network, has prioritised financial literacy as a core element of its policy agenda under the National Strategy for Financial Literacy 2019-2023," he said, adding that this strategy aims to develop responsible financial habits, enhance financial planning and build financial resilience among Malaysians.- October 1, 2024
