Bank Negara Malaysia-led Credit Counselling and Debt Management Agency (AKPK) expects to solve 10,000 cases under its debt management programme (DMP) by the end of 2016.
DMP is a programme undertaken by AKPK to assist and counsel debt-burdened individuals in regaining financial control.
CEO Azaddin Ngah Tasir said the debt management agency has settled 8,321 cases amounting to RM345.6 million in total debt as of July this year and expects the number of cases solved will continue to improve month-on-month.
“At present, AKPK has managed to solve an average of 100 cases per month through our DMP. We hope the number will continue to improve,” Azaddin told The Malaysian Reserve after a press conference held in Kuala Lumpur yesterday.
As of July 31, 2015, Azaddin said the agency has received a total of 356,935 individuals attending its counselling services and out of this total part icipat ion, 135,042 have enrolled for the DMP.
Azaddin said poor financial planning remained the top reason for defaults or debt problems at 22.3%, and 80% of it was due to mismanagement of credit card usage.
Other reasons for the high default in servicing debts under the DMP were the failure or slowdown in business and high medical costs which were at 16.7% and 14.3% respectively.
Although the number of cases solved by AKPK represents only about 6.2% out of 135,042 cases enrolled in DMP, Deputy Finance Minister Datuk Chua Tee Yong said the percentage is acceptable considering the agency was only established less than 10 years ago.
“This is still a good step (on the percentage of cases solved)…Some of the loans (to be solved in the DMP) are longterm loans in nature, such as housing loans of 20 to 30 years.
“In time, they will settle their loans,” said the minister. Chua said the public needs to clear the misconception that AKPK is only for debt-problem individuals as the agency also provides financial education to the public and counselling sessions on how to manage one’s financial budget.
“I encouraged more people, especially those who have just started joining the workforce, to come to AKPK as the services are free.
“It’s not when you encounter financial difficulties then only you seek for AKPK’s aid. Those who have just started working and have plans to buy a house or car can come to AKPK to have better judgement on having loans or getting a clearer picture on how to manage debt,” said Chua.
Aside from providing programmes such as the DMP, Azaddin said AKPK can act as an intermediary or provide direct assistance to the borrowers in negotiating with the banks.
“Take for example where an individual is having a difficulty in paying his loans as he’s currently unemployed, we here in AKPK can help him to negotiate with banks to give him more time to look for a job before he can repay the debt,” said Azaddin.