KUALA LUMPUR (Dec 9): The government should ensure the country’s household debt-to-gross domestic product (GDP) ratio at 65% or 70%, said a senator on Monday.

Senator Mohd Hasbie Muda said this was needed to reduce and control Malaysia’s household debt, which has reached RM1.57 trillion, or 83.8% of the country’s GDP as at June 2024.

“This (debt) amount is increasing annually, and requires government intervention to control and prevent household debt from spiralling.

“The level of household debt has reached almost 84% (of GDP). We hope the government can reduce this to at least 75%,” he said during the debate on the Supply Bill 2025 at policy level in Dewan Negara. 

Meanwhile, Mohd Hasbie also called on the government to expedite the proposed tabling of the Consumer Credit Act in the next parliamentary sitting.

The senator said the Act is important to make it mandatory for all non-bank credit providers, such as Buy Now Pay Later (BNPL) providers, to follow prudent standards and guidelines to protect financial consumers in BNPL schemes.

“The (Act) will also reduce excessive debt risks, especially among young and low-income borrowers.

“This will also ensure household debt growth remains manageable, and in line with their (repayment) capabilities,” he added.

https://www.theedgemarkets.com/node/737123