PETALING JAYA: Personal loans remain the primary cause of bankruptcy among young Malaysians, accounting for 15,413 cases or 49.11% of total bankruptcies in 2024, according to the Insolvency Department.
According to Berita Harian, its director-general Datuk M. Bakri Abd Majid reported that bankruptcy cases from personal loans increased to 2,776 in 2024 from 2,225 in 2023, with most cases affecting individuals aged 25 to 44.
“Young people are easily attracted to a luxurious lifestyle, and poor financial management leads them into unpaid loan debt, eventually resulting in bankruptcy,“ he was quoted as saying.
This trend is worsened by high credit card interest rates, which range from 15% to 18% annually, making debt repayment increasingly difficult, especially for those just entering the workforce.
He also called on financial institutions to tighten approval conditions for loans involving young people, ensuring that only eligible individuals are granted such facilities. He believes this could help reduce bankruptcies due to the inability to repay.
The department reported that 133,844 individuals remain bankrupt, a significant decrease from 233,483 in 2023.
With the introduction of the Second Chance Policy in 2024, 142,510 individuals were discharged from bankruptcy, surpassing the original target of 130,000.
M. Bakri stressed the need for cooperation from bankrupt individuals to help resolve their status.
“This is why we want bankrupt individuals to cooperate and visit our offices so we can assist in resolving their bankruptcy status,“ he said.
He added that restrictions under the Insolvency Act 1967, such as travel bans and prohibitions on becoming company directors, can be eased if individuals apply for permission from the Certificate of Discharge (KPI) and follow specific conditions.
