KUALA LUMPUR: Deputy Finance Minister Datuk Chua Tee Yong said Bank Negara Malaysia had set a maximum 10 year-repayment period for personal loans to protect consumers.
Previously, the repayment period for personal loans can go up to 20 years, he noted.
“This is to help ensure that personal loans do not become an issue with household trapped by high interest rate.
"Personal loans lending had dropped by as much as 20 per cent in a year between 2012 and 2015,” he said in reply to a question by Nurul Izzah Anwar (PKR -Lembah Pantai) on steps taken by BNM to monitor personal loan lending.
At the same time, Chua said the government is preventing bankruptcy due to credit cards by ensuring that applicants meet the minimum income requirement of RM24,000 per annum.
He said statistics show that the approval rate for credit card applications is controlled at between 50 and 60 per cent.
Earlier on, Chua noted that the government had taken various steps to control household debt in the country, which include providing financial consultation to borrowers through the Counselling and Debt Management Agency (AKPK).
Around 148,000 borrowers have sought financial consultation from AKPK as of March this year, said Chua.
He said the government had also in 2010 introduced the 'Pengurusan Wang Ringgit Anda' or 'Power!' programme aimed to educate the youth and new borrowers on cash flow management, the basics of loan application, among others.
Between 2010 -and 2016, some 204,000 consumers have attended the programme.