The government is ramping up efforts to give more individuals a fresh financial start, with a target of discharging 200,000 people from bankruptcy by the end of the year, said Minister in the Prime Minister’s Department (Law and Institutional Reform), Datuk Seri Azalina Othman Said.

Nearly 190,000 Already Released from Bankruptcy

Speaking at the launch of the Financial Literacy Programme at Universiti Teknologi Mara, Azalina shared that 186,000 individuals have already been discharged so far this year, an increase from 180,000 in 2023.

“We are trying to expedite this process as it is a directive from the prime minister under the Second Chance Policy. Last year, we discharged 180,000 individuals. So far, the number discharged is 186,000. We hope to reach a total of 200,000 by the end of the year.”

The Second Chance Policy is aimed at helping individuals, particularly those aged 40 and below, who were declared bankrupt due to debts not exceeding RM200,000. It is designed to support those who may have fallen into financial difficulty through circumstances such as business setbacks or economic hardship.

Younger Malaysians Are Feeling the Pressure

Azalina raised concern over the number of young people affected by bankruptcy, warning that growing financial burdens among the youth could have long-term consequences for the nation.

“We are concerned that if the younger generation, who are the future of the nation, face serious debt issues and eventually fall into bankruptcy, it will be detrimental to the country,” she said.

Between 2021 and May this year, a total of 25,578 individuals were declared bankrupt. Of that number, 70 were below the age of 25, while 3,725 were aged between 25 and 34. The highest number of cases occurred in the 35 to 44 age group, with 10,145 individuals recorded.

A further 7,256 cases involved individuals aged 45 to 54, and 4,222 were aged 55 and above. The remaining 160 cases did not have age information recorded.

Men Make Up the Bulk of Bankruptcy Cases

Gender data from the same period show that men accounted for the majority of bankruptcy cases, with 18,590 individuals, compared to 6,903 women. Another 85 cases did not specify gender.

Azalina noted that these figures reflect the need for more targeted support mechanisms and public education to address the root causes of insolvency.

How to Help Students and Young Adults Avoid Debt Problems?

Azalina stressed the importance of building financial literacy, particularly among students and young adults entering the workforce. She said this effort was central to the government’s broader Malaysia Madani agenda, which prioritises human wellbeing and social resilience.

“This is in line with the principle of ensuring human wellbeing under the strategic pillars of Malaysia Madani,” she said.

She described the Financial Literacy Programme as a proactive step to ensure that laws, knowledge, and practical tools related to financial management are more accessible to the public, especially students in higher education who are preparing for real-world financial responsibilities.

She added that equipping young Malaysians with financial knowledge is essential to helping them avoid the kind of debt problems that could lead to bankruptcy later in life.

(Source: NST)

Insider Insights

“The government’s Second Chance Policy and target to discharge 200,000 individuals from bankruptcy is a crucial step toward financial rehabilitation. At RinggitPlus, we believe that everyone deserves a fresh start, and this initiative aligns with our mission to help Malaysians build better financial futures. However, we must also focus on prevention through enhanced financial literacy education to ensure fewer people fall into the bankruptcy trap in the first place.” Siew Yuen Tuck, Group CEO, RinggitPlus

• TAGS:
• Bankruptcy
• Datuk Seri Azalina Othman
• Finances
• Financial Knowledge
• Financial Literacy
• Personal Finance