KUALA LUMPUR: More Malaysians are living on credit.
Last year, consumer loans increased 14.3% from RM550.6bil to RM629.4bil. Credit card spending rose 13.9%, from RM39.6bil to RM45.2bil.
According to the inaugural Commerce & Consumer Report 2005 released by the Domestic Trade and Consumer Affairs Ministry and Ratings Agency Malaysia (RAM) Consultancy Services, this meant that Malaysian households are more willing to spend.
And the ministry is very worried about this trend.
“The numbers indicate that we are heading towards a lifestyle of living on credit,” Domestic Trade and Consumer Affairs secretary-general Datuk Seri Talaat Husain told a media briefing here on the report.
“Our worry is the debts a person has chalked up.
“The ability to pay back might be difficult for certain sectors of the population.”
Talaat said recent Bank Negara reports of young people running up huge debts and being declared bankrupts were a clear indication of the need to be cautious and to ensure Malaysians did not end up always spending beyond their means.
RAM Consultancy Services managing director and chief economist Dr Yeah Kim Leng noted that those in the lower income group were usually the ones in financial distress and unable to pay their debts.
“It could be left to the banks to decide whom they want to extend their loans or credit cards to.
“Or Bank Negara could tighten credit card regulations.”
On the positive side, savings amounted to 16% of gross domestic product.
“Most of these savings are derived from large government linked-companies and corporations and indicate that Malaysia on the macro level is robust and has a large capacity to spend or invest money,” said Dr Yeah.
The Commerce & Consumer Report 2005 will be launched today by Prime Minister Datuk Seri Abdullah Ahmad Badawi at Putra World Trade Centre and will be available to the public at RM10 each.
The publication highlights the current performance and trends in the distributive trade sector and contains key statistics about the ministry’s activities.
It also has sections on consumer spending, consumer complaints and claims, and trademarks and intellectual property.
Did you find this article insightful?