“Mentega Dapur” is my creation of today’s daily living problems. During or before the Covid-19 pandemic, many were in undue stress with their business or family matters. Many have no homes, daily food for family, or other basic expenses. In addition, they are in debt with credit companies and/or professional “Ah Longs”. Some have RM100,000 or more outstanding with interest of 25-30%! Others are worse off. And some others have interest “frozen” and repayment restructured. But even then without a job or some employment how do you repay? Hence the pressure to withdraw from EPF. But if your EPF account has been fully withdrawn because you are a senior citizen, then where do you go for an eventuality – Ah Long? Credit card company?
As at end of December 2022, the current balances under credit cards was RM39.5 billion. The overdue balances was about RM1.6 billion, which is within reasonable bounds but still significant - about 4% of the total. Household debt is sum of credit cards, personal loans, home loans and others. In 2021, household debt made up of the following:
To overcome the problems faced by middle or lower income groups, the Government has to initiate a fund or an institution, hopefully with BNM oversight to refinance/take-over debts owed by individuals and restructure them with repayment of 7-10 years, concessional rate of 2% and little or no collateral. Then we are really in the “Madani” society – meeting the needs of “Mentega Dapur”.
References:
Monthly highlights and statistics in December 2022, BNM
Spotlight: Household Debt, BNM, BIS, DOSM
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