A debt worth RM2 million was ‘collected’ from 23 individuals by the Credit Counselling and Debt Management Agency (AKPK), a wholly-owned subsidiary of Bank Negara Malaysia. These 23 individuals are part of the total of 14,000 individuals who had sought AKPK’s assistance to restructure their debt to financial institutions which amount to about RM900 million.

Through the restructuring program, the 23 individuals paid up their debt amount in less than 2 years. It was noted by the CEO of AKPK that the bank expected more people to fully settle their debt under the agency’s debt management programme from 2011 onwards because the minimum loan restructuring period under the programme is five years. AKPK, which acts as a collection agency for banks, distributes the payments collected from individuals whose loans have been restructured or rescheduled to the banks and financial institutions.

Of the 20,000 people referred to AKPK debt management programme, 14,000 cases have been approved. The remaining are either under approval or rejected. Rejection can happen as a result of bankruptcy, advance stage of legal action, negative income and unwillingness of the individuals to disclose details of their debts. People who do not pay after a certain period of the due date will have their programme terminated by AKPK.

People end up in debt because of loss of control on credit card usage, inadequate financial planning and high medical expenses. Excessive use of credit card appears to the be primary reason for default in repayment and will continue to be so in the coming years.

Source: http://www.btimes.com.my/articles/26DEBT/Article/

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