AKPK: High loans leading to rising bankruptcy

Fresh from article about economics shared yesterday (and currently active reading about economics material which in line with my tasks at hand right now), I would like to share another article, which I know, some of us have reasons why in debt.

Kindly read what AKPK reportedly said:

KUALA LUMPUR: Malaysians are taking up more loans than they can afford with their salaries, says Credit Counselling and Debt Management Agency’s (AKPK) chairman Datuk Mohd Hanif Sher.

According to AKPK statistics, as of Dec 31, last year 62,818 individuals with a total debt of RM4.5bil have been registered under the agency’s Debt Management Programme (DMP).

In light of the increasing number of bankrupt individuals annually, Minister in the Prime Minister’s Department Nancy Shukri said financially strapped Malaysians should enrol  in the DMP to prevent the number of bankrupts from rising in the country.

Shukri said the ministry through the Malaysia Department if Insolvency (MdI) will be going “all out”to conduct joint-awareness programmes with AKPK throughout the nation.

“Many people are not aware of the AKPK’s role and function. Getting individuals who have incurred debts of up to RM2mil and below to sign up for the debt management programme will enable the Insolvency Department to reduce bankruptcy by accelerating discharge,” she said after visiting the agency’s headquarters at the Maju Tower here on Tuesday.

According to statistics from MdI, 13,238 people were categorised as bankrupt in 2007, 13,855 in 2008, 16,228 in 2009, 18,119 in 2010, 19,167 in 2011 and 19,575 in 2012, with those in the private sector or doing business forming the highest percentage.

Mohd Hanif said 22.8% of the individuals who have enrolled in the agency’s Debt Management Programme (DMP) cited poor financial planning as a cause for defaulting on their loans.

“Individuals seeking financial management services from us have cited this as the main cause for defaulting their loans,” he said.

Other factors with high percentages include high medical expenses and business failures which contributed 18.1% and 15.3% respectively.

I still believe we have our own reason if we have debts. Yes, I do. We do have justifications why we have to borrow. Only you yourself can come to your senses why you need to borrow.

Speaking of which, I bumped into a report done by Foreign Commonwealth Office on ASEAN economy under ASEAN Economic Bulletin, January 2014 edition (WARNING: PDF copy). This is one of the items that attracted my attention:

Econs Q1 2014

I leave it up to the readers to interpret.. but I do hope it is done with knowledge, not emotion.

Frankly speaking, I do not know why some of us in debt for I think not a good reason. Especially when I read this yesterday:

Don’t go bungee jumping when you’re not sure if your heart (and money) can take it.

In other words, do not spend on things unnecessarily and something you can’t afford.

And for the record, I also have debts to settle.

Question on the street: How many falls in love with the things that they initially think it is an investment?

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