Business

Monday May 9, 2011

No big rise in loan defaults seen


KUALA LUMPUR: The Credit Counselling and Debt Management Agency (AKPK) does not see any drastic increase in loans default cases with the recent interest rate hike.

Its head of corporate affairs and communication, Devinder Singh, said the 25 basis-point increase in the key interest rate or the benchmark overnight policy rate (OPR) to 3% had seen a marginal increase in the cost of borrowing.

“It is up to individuals to manage their debts and finances prudently. We always recommend that loans taken should not be more than 40% of the salary,” Devinder said during the “Empower Your Money Sense” seminar on Saturday.

Devinder Singh

AKPK, a wholly-owned subsidiary of Bank Negara, was set up to provide financial counselling and debt management to individuals.

Devinder said as of March this year, of the 147,227 counselling cases handled by the agency, 56,737 were under the debt management programme which amounted to about RM5bil in debts.

Devinder cited medical expenses, poor financial planning, loss of control in the usage of credit cards, slowdown in businesses and the loss of jobs as the reasons for people to be in financial distress. – Bernama

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