Millennials are piling up debt and risking bankruptcy by relying on loans and credit cards to support their lifestyle choices. About 84,805 Malaysians were declared bankrupt between 2015 and 2019. Based on the figure provided by the Insolvency Department, people below the age of 34 made up 26% of the bankruptcy cases.
Even worst, it was stated by the then Bank Negara Malaysia (BNM) Assistant Governor, Nazrul Hisyam Mohd Noh, that 47% of Malaysian youth have high credit card debt in 2018.
The main reason for bankruptcy at a young age is the “five-series” loans; personal, education, car, home and credit card

Defaults in motor vehicle and personal financing loans made up 49% of the total bankruptcy cases in 2018 alone while bankruptcy cases involving personal financing and credit card debts had grown by 104% and 43% respectively in 2018 compared to 2012.
Findings by BNM also pointed out that millennials or Gen Y (the generation born between 1981-1996) spend well beyond their means due to impulse-buying behaviour, easy access to personal loans and credit card financing, the want for instant gratification and seamless online purchasing.
“High rates of bankruptcy because of borrowing for consumption rather than for wealth accumulation are an increasing concern, especially among younger borrowers with limited financial knowledge and literacy.”
Other reasons for bankruptcy among young Malaysians are becoming guarantor for their parents’ cars and owning more than one credit card.
In fact, there are 11 million Malaysians who had credit cards and it could be said some youth had up to five credit cards.
Youth should practicing the 2B’s- budgeting and balancing in life to avoid debt

It is important for young Malaysians to understand the importance of being financially literate and acquire the necessary financial skills. It is vital for youth to have a basic skill in managing financial resources as in practicing the 2B’s – budgeting and balancing in life. Budgeting is identifying how much money is coming in every month and how much is going out every month.
Youth need to learn and acquire the essential skills and knowledge from a young age in order to make the right decisions in managing debt and planning finances in the future. It is hoped that more people will not risk taking personal loans because of financial constraints during the pandemic and be prepared to face the next crisis.
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