AKPK: Poor planning main cause of financial problems

KUALA LUMPUR: The two main culprits of the financial problems faced by individuals seeking help from the Debt Management and Counselling Agency (AKPK) are poor planning and high cost of living, said chief executive officer, Azaddin Ngah Tasir yesterday.

He said AKPK's data showed that 43.3 per cent of those seeking help was due to poor financial planning, followed by high cost of living at 21.8 per cent, and business slowdown and failure (14.5 per cent).

Other reasons included high medical expenses ( 8.8 per cent), loss of jobs/retrenchment/loss of breadwinner (9.4 per cent) and others (2.2 per cent).

Since the agency's inception in 2006, a total of 683,169 individuals had sought its assistance, and out of these, 210,814, or 30.9 per cent, enrolled in its Debt Management Programme, and 15,439 cases involving RM617.4 million were resolved as at Dec 31, 2017.

“About 73 per cent of those seeking help were earning below RM4,000 monthly, and we think they were overexposed and underestimated the commitment they were getting into.

“They did not know how to work on a budget seriously and what was to be prioritised. So, the minute they make some mistakes, they cannot cover it back because there is no buffer,” he said on the sidelines of the Voluntary Agreement ( VA) awareness briefing here yesterday.

Azaddin said there was no stigma attached to those who seek assistance from AKPK.

“If you come to AKPK, you are associated with debt and so on, but today, we see that people have accepted AKPK as an avenue to help them restructure and manage finances and debts,” he said, adding that there had been an increase in the number of people seeking help from the agency. — Bernama