Need Free Help Managing Your Debts?

Category: Debt Management

In more ways than one, debt can be a four-letter word.

It is VERY easy to fall into and extremely difficult to get out of it. Everyone should know this but many don’t know there is help to manage debt in Malaysia. When you’re carrying a large debt burden and worried that you may be unable to pay it off or you’re looking to rebuild your credit, AKPK can help you manage all of your debts and, offer you financial advice for free!

What is AKPK?

Agensi Kaunselling dan Pengurusan Kredit (AKPK), or the Credit Counselling and Debt Management Agency, was established by Bank Negara Malaysia (BNM) as part of a Consumer Protection Framework under BNM’s 10-year Financial Sector Master Plan. AKPK helps individuals take control of their financial situation and gain peace of mind that comes from the wise use of credit. They offer:

  • Financial education on the responsible use of money and credit management skills.
  • Counselling and advice on financial management.
  • Debt management programme to assist consumers to regain financial control.

Statistics from the Malaysian Department of Insolvency show over 95,000 individuals have been declared bankrupt between 2014 and 2018. Uncontrolled credit card usage and excessive borrowings dragged these thousands of Malaysians, many of whom are married, into bankruptcy and are adding financial strain to families. The main causes that dragged them into the insolvency were personal loans (27.76%), hire purchase (24.73%), housing loans (14.09%) and credit card (9.91%).

According to AKPK’s Financial Behaviour and State of Financial Well-being of Malaysian Working Adults Survey last year, half of Malaysians admitted to having difficulties to raise RM1,000 for emergencies. One in five working adults said they did not save in the past six months and almost 3 out of 10 individuals had to borrow money to buy basic needs.

See also: Know The Difference Between Good Debt and Bad Debt

AKPK chief executive officer Azaddin Ngah Tasir said in a report last year that the largest and main group with the most debt problems are people aged between 30-50 years old and around 85% of the participants of AKPK’s Debt Management Programme earn less than RM5,000 a month.

However, Azaddin says, “If you take advantage of the promotions offered, credit cards can be useful. For example, when you dine out, rather than paying cash, you can get 50% when you use a credit card. If we take advantage of the promotions offered and pay the amount due on time, having a credit card shouldn’t be an issue.”

How AKPK can help you?

Although AKPK was originally known for their Debt Management Programme (DMP), they also provide financial education and financial counselling sessions, and debt management program to Malaysians. All of these services are available for FREE.

As a word of caution: If you are approached by any parties claiming to be “third-party agents of AKPK”, DO NOT engage nor solicit any advice from them. AKPK does not charge fees for consultancy services nor do they have any agents.

Debt Management Program (DMP)

Under this program, AKPK will develop a personalised debt repayment plan for individuals who are unable to manage their monthly repayments to banks. An individual will have a one-to-one session with an AKPK officer where they will calculate their financial commitments, and then proceed to work out a restructuring plan. A plan usually takes between 8 to 10 years to complete.

AKPK will negotiate with banks on behalf of borrowers, and upon agreement from both the borrower and the bank, a DMP confirmation letter will be issued by AKPK.

Basic requirements for you to enroll to the DMP program are:

  • The individual has not been declared bankrupt
  • Is not in an advanced stage of litigation with banks
  • Has sufficient net disposable income after meeting one’s expenses
  • Has debt not amounting to more than RM2 million

Read more about the DMP here and to apply for this program, first fill up the online application form for the Debt Management Program. After that, you can proceed to set up an appointment at the nearest AKPK branch to you. Prepare the documents you need to bring and attend the counselling session. Keep in mind that AKPK does not deal with hire purchase loans or housing loans under the DMP, and while enrolled in the program, you will not be able to undertake any credit facilities from banks.

As at 31 December 2018, cumulatively 246,041 Malaysians have enrolled in AKPK’s Debt Management Programme (DMP), from which
44,925 registrations were from 2018 alone. The DMP has helped 3,906 Malaysians fully settle their debts. This involved full settlement of 31,754 credit/loan facilities. Imagine, on average, each of the 3,906 individuals have had about 8 loans or credit debts to settle.

Financial Counselling

AKPK has seen an increase of about 20% this year of people seeking financial counselling from them since the economic slowdown. Malaysians can receive counselling and advice on managing their debt from AKPK who will help them to identify and clarify options that are available to improve their financial situation.

The counselling and advice sessions are on a one-to-one basis. One can get advice on budgeting, credit related issues, and money management. You don’t have to make an appointment for the counselling sessions, but do take note of the counselling schedule below:

Financial Education

In line with AKPK’s aim to improve financial knowledge of Malaysians, they carry out consumer education programs, workshops, seminars and roadshows. AKPK also provides financial education based on the different scenarios that people will face through different life stages. Moving forward, AKPK is looking to focus on educating Gen Y’s and Gen Z’s to increase their financial literacy.

Check out AKPK’s learning center where you can find financial information catering to varied target audiences such as fresh graduates, those starting a family, individuals preparing for retirement, and more. AKPK also publishes easy to read financial guide books in English, Malay, Mandarin, and Tamil to increase one’s financial literacy. The publications can be bought for a minimal fee at AKPK’s branches.

How To Get Help

AKPK has a total of 11 branches and 26 counselling offices across Malaysia, to find the nearest to you click here or you can call the AKPK Infoline at 03-2616 7766.