KUALA LUMPUR: Outstanding loan arrears owed to the federal government totalled RM8.084bil as at Dec 31, 2025, says Deputy Finance Minister Liew Chin Tong.
He said companies accounted for the largest share of borrowers at 62%, followed by state governments at 32%.
The arrears mainly comprised public basic infrastructure projects involving clean water supply, sewerage, low-cost public housing and public transport.
“The amount comprises RM5.709bil in outstanding principal and RM2.375bil in outstanding interest and late-payment interest.
“The arrears rate stood at 15.67%.
“This amount is manageable and has declined compared with the average of 21% recorded between 2020 and 2022,” Liew said when winding up for his ministry during the debate on the Auditor-General’s Report in the Dewan Rakyat yesterday.
He said the government will continue to strengthen borrowers’ repayment capacity, particularly through restructuring based on assessments of their financial capacity, current debt levels and projected cash flows.
“This is to ensure borrowers can meet their financial obligations by reducing their repayment commitments through an extension of the repayment period, without affecting service delivery to the people,” he said. Liew said that loan write-offs would be considered based on several criteria, particularly after all loan recovery efforts, including legal action against borrowers, had failed to yield results for the government.
“Only the loan interest will be considered for write-off, and only companies confirmed to be insolvent based on reports by the Companies Commission of Malaysia and after obtaining the views of the Finance Ministry’s legal division,” he said.
Liew said the existing loan assessment model had been enhanced by introducing a mandatory feasibility assessment before any approval was granted. — Bernama
