KUALA LUMPUR, July 10 (Bernama) -- MCA supports the measures introduced by Bank Negara to curb household debt, which will also help alleviate social and public safety issues.
Its president Datuk Seri Dr Chua Soi Lek said it was undeniable that the increase of defaulters had caused the number of bankrupts to rocket and it was rather unfortunate to know that many of the bankrupts were young people.
"Young people become bankrupt because they spend more than what they earn. They are chasing a luxurious lifestyle and ending up unable to repay their car instalments as well as their credit card debts," he said in a statement today.
Dr Chua said the Bank Negara report showed that household debt continued to increase averagely at an annual rate of 12 per cent over the last five years and had risen to 83 per cent of the gross domestic product (GDP), hence there was a need to address the issue as Malaysia was still a developing country.
"The Standard Chartered Bank report also shows that Malaysia has the highest household debt in Asia and many households are unable to make ends meet. Such a situation is similar to the one experienced by the United States during the 2008 economic crisis," he noted.
CHUA-BANK NEGARA 2 (LAST) KUALA LUMPUR
Therefore, Dr Chua said, the measures introduced by Bank Negara would help to stop the public's uncontrolled spending behaviour and at the same time, improve household and personal income stability.
The three measures introduced by Bank Negara are maximum tenure of 10 years for financing extended for personal use, maximum tenure of 35 years for financing granted for the purchase of residential and non-residential properties and a prohibition on offering pre-approved personal financing products.
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