The Consumers’ Association of Penang (CAP) is pleased to know that our Prime Minister Tun Dr Mahathir Mohamad has stated that the tabling of the Consumer Credit Act will be expedited to this year. Last month when the BNM Governor, Datuk Nor Shamsiah Mohd Yunus, had stated that a Consumer Credit Act could finally be …
The country’s household debt is high at 88% of the Gross National Product and with an average debt repayment ratio of around 44% (that means that 44% of the income goes to settling debts) Furthermore, as many as 55 people on average being declared bankrupt every day.
That means that many people have been unable or may soon be unable to pay their monthly instalments. With so many Malaysians in debts it makes sense to regulate the debt collection business.
According to the Bank Negara’s Annual Report 2010, Malaysia’s household debt at end of 2010 was RM 581 billion or 76% of GDP (Gross Domestic Product). The Bank claimed that the household debt is still manageable because of income growth, high levels of savings and favourable employment opportunities.
However, if we look at household debt from the point of disposable income then the picture painted is worrisome because it reveals that households are spending about half of their income to pay off their debts.
How many more suicides, how many borrowers have to be disowned by their families before government takes the Ah Long problem seriously? We cannot take the attitude that these people should have known better than to borrow from Ah Longs.