PETALING JAYA: The number of Malaysians declared bankrupt last year decreased by 15.5% to 4,810, as compared to 5,695 in 2022.
Figures from the Malaysian Department of Insolvency (MDI) indicate a continuous decline in bankruptcy cases annually since 2019.
In total, 37,461 individuals were declared bankrupt from 2019 to 2023.
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The majority of bankruptcies were due to the same reason, with a significant portion belonging to a specific age group. Here’s what the statistics reveal:
Top cause of bankruptcy
Failure to repay personal loans emerged as the primary cause leading individuals into bankruptcy.
Nearly half of Malaysia’s bankruptcy cases (46.3%) were attributed to personal loans, accounting for 2,225 cases in the previous year.
The other significant reasons included business loans at 1,051 cases (21.9%) and housing loans at 428 cases (8.9%).
Credit card debt, another form of borrowing, only contributed to 1.9% of bankruptcies in 2023.
The data indicates a significant drop in the number of bankruptcies resulting from credit card debt, decreasing from 207 cases to 92 in the previous year.
Most common age group and gender
The largest group of individuals who experienced bankruptcy each year from 2019 to 2023 were in the age range of 35 to 44.
The second most prevalent group fell within the age bracket of 45 to 54, followed by those aged 25 to 34.
There were 122 bankruptcy cases involving individuals aged 25 and below.
More males went bankrupt than females, with men accounting for 72.6% (3,492 cases) of bankruptcies last year, while women made up 27.4% (1,306 cases).
Top states
Selangor reported the highest number of bankruptcies last year, with a total of 1,249 cases, followed by the Federal Territories with 626 cases and Johor with 489 cases.
An overall downward trend in reported bankruptcy cases can be observed across all states over the past five years.
To assist individuals facing financial challenges, the government expanded its program to aid bankrupt individuals last year.
The initiative, known as the Second Chance policy, was broadened to include individuals aged 40 and below with debts not exceeding RM200,000.
It aims to discharge 130,000 bankrupt individuals annually, enabling them to move forward with their lives and contribute to the nation’s economic growth.
my.Malaysia is a series of data stories that highlights interesting facts and figures on anything and everything related to Malaysia.
