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.
We are all aware of the havoc Ah Longs have wrecked in the lives of the families where one of its member was unfortunate enough to have borrowed money from the Ah Longs.
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.
With their high interest rates, and unsavoury reputation, those who chose to borrow from the Ah Longs can only be said to be desperate.
For the compulsive gambler, gambling is an addiction and when he has a craving for it, nothing else matters. The gambler is so consumed by his addiction t that he cannot break from it though he knows that he is hurting his family. When his money runs out he takes loans from the Ah Longs to feed his addiction.
It is nothing new to read in the papers about a house been splashed with red paint by Ah Longs or a parent tearfully and publicly disowning a son in the hope that the Ah Longs will leave the rest of the family alone. Now and then an Ah Long victim may take his own life as it is the only way to escape.