3 days ago
- Business
- New Straits Times
More than 4,000 civil servants declared bankrupt since 2020
KUALA LUMPUR: Insolvency Department statistics show that 4,194 civil servants have been declared bankrupt from 2020 until June this year, the Dewan Rakyat heard was told.
Deputy Finance Minister Lim Hui Ying said this figure represents 0.3 per cent of the country's 1.6 million civil servants.
She said the main causes of financial difficulties were high debt commitments and the rising cost of living.
However, she said the government would continue to monitor the situation to ensure civil servants manage their finances prudently.
"For civil servants, we frequently engage and negotiate with the Credit Counselling and Debt Management Agency (AKPK) if they are facing financial issues.
"At the same time, for banks, we have the debt service ratio. We monitor this closely — the median is currently 34 per cent, but for us, it is at 41 per cent.
"With the cost of living having increased, civil servants are indeed facing problems.
"Through the Public Service Remuneration Scheme (SSPA), we have also raised salaries for civil servants, while the government has allocated RM100 for the Payung Rahmah programme, which will directly help civil servants cope with the rising cost of living," she said.
Lim said this during the question and answer session, in response to a question from Abdul Latiff Abdul Rahman (PN-Kuala Krai).
Latiff had asked about the government's measures to address the worrying trend of rising household debt, particularly among civil servants, and the relevance of financial institutions approving loans of up to RM400,000 for middle-income earners, as well as control measures to ensure household financial stability.
Lim said the country's household debt level remained manageable, with the total reaching RM1.65 trillion, or 84.3 per cent of the Gross Domestic Product (GDP), as of March 2025.
"This shows little change compared to the end of 2024. Household debt levels should also be viewed holistically, particularly by considering household financial assets, which are much larger, totalling RM3.45 trillion during the same period.
"Overall, household financial assets remain 2.1 times higher than debt, providing a strong financial buffer. The government has implemented various control measures to manage household debt and strengthen household resilience.
"A total of 61.1 per cent of household debt comprises housing loans," she said.
