by BERNAMA / pic by HUSSEIN SHAHARUDDIN
THE Credit Counselling and Debt Management Agency (AKPK) sees debt repayment returning to normal in October among its over 300,000 customers under its debt management programme, following the expiry of the automatic moratorium period on Sept 30.
Chief executive officer (CEO) Azaddin Ngah Tasir said AKPK was happy to see things moving to normal as per pre-pandemic, but acknowledged that it is still early days.
“This could be from their savings during the automatic moratorium, for not having to pay for the last six months. We hoped it is not the case and they are really able to pay because of good cash flow.
“Nevertheless, we are prepared to help in case they have issues in future months,” he said during a webinar organised by Bank Negara Malaysia (BNM) in conjunction with the financial literacy month entitled #BePrudent: Take Control of Your Finances here, today.
Azaddin noted that during the automatic moratorium. AKPK had also provided moratorium for customers under its debt management programme and after its expiry, had identified a number of those affected by COVID-19 to be given targeted assistance in terms of payment holiday extension of three months or reduced payment.
On BNM statistics, he cited the percentage for extension was about 40 per cent against 50 per cent for reduced payment, but for the AKPK customers which were more vulnerable, the agency saw the ratio at 80:20.
He said that in facing financial challenges, there was a need to have a change in mindset, whereby the new normal is not only in health but also in financial.
“Learning from the COVID-19 experience, we can actually be happy with less. We can live a simpler life, for example, during the recent Hari Raya when we went through a stress-free festival with just our loved ones, with no need to ask for festival advance. We do not really have to spend a lot but just concentrate on what matters.
“This is a good lesson that we can have more with less,” he said.
He pointed out that in good financial management, it is not about how much income you earn but how you manage what you have, which is more important to avoid becoming vulnerable.
But Azaddin pointed out that lower income people were more vulnerable because they do not have enough buffers, therefore, it is a must for them to make the right decisions.
Meanwhile, the Federation of Malaysian Consumer Association (FOMCA) CEO Datuk Paul Selvaraj said that in facing the difficulty, consumer empowerment is important, hence the need to take the initiative to educate themselves.
He said the Malaysian financial literacy rate was around 36 per cent compared to global and developed economies with more than 60 per cent literacy.
FOMCA, he said, was concerned about the ability of Malaysian consumers in managing their financials properly. In 2010, we saw an increased number of bankruptcies and financial problems among Malaysians particularly the young workers.
“A survey revealed that 31 per cent of consumers had no control of finances. Although savings is important, 88 per cent reported that they had no savings, with 68 per cent saying they did not save enough.
“You should have three to six months’ expenditure for emergency savings to put in a separate account and be critical and judicious in spending that amount.
“The COVID-19 pandemic has shown what can happen if you do not have that amount. Then, either you have to borrow or dig into your savings which are kept for other purposes,” he added.