A staggering 53,000 Malaysians under 30 are grappling with a debt burden of RM1.9 billion, as revealed by the Credit Counselling and Debt Management Agency (AKPK).
This alarming trend has raised concerns about the increasing ease of access to personal loans, credit cards, and the fast-growing ‘Buy Now, Pay Later’ (BNPL) schemes.
Finance Minister II Datuk Seri Amir Hamzah Azizan highlighted the severity of the issue during the launch of Financial Literacy Month 2024, noting that 28% of working adults have resorted to borrowing money just to purchase essential goods.
The lure of BNPL schemes, while offering convenience, is proving to be a double-edged sword, especially for young adults.
A Lack of Financial Literacy Fuelling the Crisis
The Minister expressed deep concern over the low levels of financial literacy among Malaysians.
A study by the Organisation for Economic Cooperation and Development (OECD) revealed that only 36% of Malaysians possess a basic understanding of financial concepts like interest rates, inflation, and risk diversification.
This figure falls below the global average of 42%, placing Malaysia 26th out of 39 countries.
Such limited financial knowledge, combined with Malaysia’s high household debt—amounting to RM1.53 trillion in 2023—has exacerbated the financial strain, especially among the younger generation.
Building Financial Resilience for the Future
In response, the government, through initiatives like the Financial Education Network, has prioritised improving financial literacy.
Under the National Strategy for Financial Literacy 2019-2023, efforts are underway to cultivate responsible financial habits, enhance financial planning, and foster financial resilience.
These steps are critical to ensuring long-term economic empowerment and financial well-being for all Malaysians.
However, with household debt currently standing at 84.2% of the nation’s gross domestic product, it is clear that more immediate action is needed.
As financial literacy continues to lag behind, the government must ramp up its efforts to equip young Malaysians with the knowledge and tools necessary to avoid the pitfalls of debt and secure a stable financial future.
