For the past several years, data has consistently shown that more and more people are going bankrupt at a young age.
Between 2015 and 2019, about 85,000 Malaysians
below the age of 25 were declared bankrupt, a Sinar Harian
"Five-series" loans are dangerous
According to Hijrah Wealth Management founder and consultant Rohani Mohd Shahir, the main reason for bankruptcy at a young age is the "five-series" loans: personal, education, car, home and credit card.
"All the loans combined can easily bankrupt a young person," she said at the Wacana Al-Quran Siri 8
talk titled "Bankruptcy at a Young Age" organised by Karangkraf group.
Rohani also said that when she was working in the banks in the 1980s and 1990s, it was very rare to see people below the age of 40 being declared bankrupt, but that has since changed.
"Among the reason for bankruptcy among young people are becoming guarantor for their father's cars and some who go bankrupt because they like to be stylish and own more than one credit card.
"In fact, there was a point where 11 million Malaysians had credit cards and it could be said some young people had up to five credit cards," Rohani reportedly said.
Rohani said that it was worrying to see so many young people, especially Malay youth, going bankrupt.
"I hope young people will be more aware of such statistics and not get into so much debt at such a young age that they can go bankrupt," she said.
Rohani said that it used to be that the main reason for bankruptcy was car loans but nowadays more people are facing the fate due to unpaid personal loans.
She hoped that more people will not risk taking personal loans because of financial constrains during the COVID-19 pandemic.