KUALA LUMPUR: DEBT exposure has seen Malaysians between age 30 and 40 becoming the most financially distressed cohort, said economist Professor Dr Yeah Kim Leng from Sunway University.
This was brought about by their high living expenditure, especially those in urban areas.
"Urban lifestyle trends and activities are expensive. The younger generation's problem is further aggravated by retrenchments, salary cuts and loss of business income during the recession in 2020."
Yeah was commenting on the fact that more than 40 per cent of people enrolling in the Debt Management Programme (DMP) under the Credit Counselling and Debt Management Agency comprised individuals aged between 30 and 40.
He said the slow increase in income had also resulted in inadequate savings.
"With no or little savings for an emergency, such as from the income and employment shocks caused by the Covid-19 pandemic, the young cohort is more vulnerable to financial distress.
"The debt restructuring relief offered under DMP is an effective way to tackle the young generation's financial woes."
Yeah added that financial literacy was one of the critical approaches to ease the problem, inculcating prudent spending and saving habits in individuals.
"Financial education is necessary not only for the distressed individual, but also for those not economically affected by the pandemic."
He said it was important to increase income through skills upgrading, productivity enhancement and entrepreneurship opportunities.
"This is to complement financial education in strengthening one's ability to withstand various income, employment and inflation shocks."
On Tuesday, the Dewan Negara was told that the number of bankrupt youths had shown a downward trend in the past three years.
Youth and Sports Deputy Minister Datuk Seri Ti Lian Ker said there were 10,137 bankrupt individuals from 2020 until June this year, based on information from the Insolvency Department.
He said there were 21 youths under the age of 25 who became bankrupt in 2020, with the number dropping to 20 last year and only six this year up to June.
As for those aged 25 to 34, 1,741 became bankrupt in 2020, before the number decreased to 1,060 last year and 425 this year until June.
Among individuals aged 35 to 44, 3,150 individuals were declared bankrupt in 2020, and the number dropped to 2,535 last year and 1,179 up to June this year.
Some of the causes of bankruptcy were personal loans, car instalments, business loans, housing loans, credit card debt, corporate guarantors and income tax debt, besides failure to pay Employees Provident Fund contributions and education loans.