If Bank Negara raises interest rates again, the number of bankruptcies in the country could double!
The National Bank (Bank Negara) already raised the overnight policy rate (OPR) by 0.25% in May and may announce another 0.25% rate increase on July 6. The increase in interest rates by Bank Negara will be followed by an increase in floating lending rates by the country’s banks.
The interest rate increase by the National Bank has already put many borrowers under pressure as the monthly loan payment required also increases. The B40 low-income group and the M40 middle-income group have borne the brunt of the national bank’s interest rate increase. Many borrowers are crying out that they can’t afford it and are calling on the NB to slow down the rate hike.
Financial experts are also concerned that interest rate hikes by national banks will lead to more bankruptcies, with 46,132 people already in bankruptcy between 2018 and May 2022. The number of bankruptcies in the country in the first five months of this year was 2,694, or an average of 18 people per day.
Sixty percent of the bankrupts are young people between the ages of 25 and 44, and there are more than 200 bankrupts under the age of 25. More than half of these bankruptcies were caused by personal loans. Other bankruptcy factors are auto loans, business loans and delinquent credit cards.
