BNM 'closely monitoring' household debt levels
Bank Negara Malaysia (BNM) governor Zeti Akhtar Aziz today said that the central bank is “closely monitoring” the levels of debt undertaken by low-income households in order to avoid a subprime crisis unfolding in the country.
“Households with incomes less than RM3000 (a month) and below are increasingly over-leveraging, borrowing not for assets like houses or cars, but taking up personal loans.
“This is where the concern arises and we are taking up this issue with agencies like cooperatives, etc, who lend a significant amount (to these households),” she told reporters.
Speaking after presenting BNM’s annual report at its headquarters in Kuala Lumpur, she said that lower income households only make up 11 percent of the portfolios of commercial banks.
She said that while those with a steady income stream should not be deprived of credit, measures are being taken to ensure sustainability.
“If too high a percentage of earnings is used to sustain debt, it is not sustainable. In the United States, this caused the subprime crisis.
“It is not a concern now, but it could be in the future so we are taking action now,” she said.
The actions, she said, include working with non-bank lending agencies to take up responsible lending guidelines.
The non-bank agencies who provide credit services include cooperatives.
Go to KiniBiz for more .
For more news and views that matter, subscribe and support independent media for only RM0.36 sen a day:Subscribe now
Keep Malaysiakini independent!
Malaysiakini will be 18 this year. That we’ve survived this long is because of you.
Your support matters. A lot. Especially those who pay RM150 annually, RM288 biennially or RM388 triennially to keep Malaysiakini independent from government influence and corporate interests. Advertising alone will not keep Malaysiakini afloat.
Together, we’ve gone far. We’ve covered three prime ministers, four general elections, five Bersih rallies, and countless scandals. But the journey continues.
Help us deliver news and views that matter to Malaysians. Help us make a difference for Malaysia.