KUALA LUMPUR: Many civil servants are taking up more loans to cope with the rising cost of living, resulting in them being declared bankrupt.
Cuepacs president Datuk Azih Muda (pic) said civil servants from the middle and lower ranks were resorting to such measures, thinking that it would offset their expenditure owing to the rising inflation rate.
“How wrong they are. Our rough estimate shows up to 100,000 civil servants may soon be declared bankrupt. As of now, 3,000 of them are already bankrupt.
“This situation may worsen as many more are also taking up loans from loan sharks,” he told reporters during a launching of a Workers’ Seminar, in conjunction with Labour Day, yesterday.
Azih said they could lose their jobs or get suspended, resulting in more domestic problems like divorce and broken families.
“Just imagine if half of the 100,000 civil servants are married with children,” he said.
Azih said there were now at least 20 financial institutions, including cooperatives that had been appointed to provide loans to civil servants by way of monthly deductions.
He pointed out that these entities do not cross check the background of each applicant.
Citing an example, Azih said a civil servant, who is only eligible to apply for a RM50,000 loan, could go to four banks to apply and get a total sum of RM200,000.
“Some even submit fake salary slips to ensure that they are successful and this is when the problem starts.
“The Government should come up with a system to monitor this alarming situation,” he said.
Azih said given the present economic situation, government servants should tighten their belts rather than find a short and an easy way out.
“This is akin to digging a hole to fill another and in the end, there will be too many holes.”
Cuepacs has 1.2 million members and 106 affiliated unions.