KUALA LUMPUR, July 2 — Poor financial planning and living beyond one's means are among the main factors for debts and inability to repay loans, said Credit Counselling and Debt Management Agency (CCDMA) chief executive officer Koid Swee Lian.

Out of 90,807 borrowers helped by the agency under the Debt Management Programme (DMP) from 2007 to May 31 this year, she said 20,886 or 23 per cent had poor financial planning.

According to her, 18,161 or 20 per cent were in debt due to high medical expenses, others (17,253/19 per cent), business problems or failure (13,621/15 per cent), failure to control credit card usage (9,989/11 per cent), loss of employment (9,081/10 per cent), and death or loss of source of income or failure in investment (908/one per cent each).

"During the same period, a total of 222,942 borrowers sought counselling from CCDMA but only 90,807 joined our programme," she told Bernama.

Koid said that until May 31, 3,591 borrowers managed to get out of debt, with a total of RM130.05 million in debts paid up.

She said individual borrowers could obtain help from the agency to structure various loans including housing, vehicle, personal or credit card arrears.

However, those interested in joining the programme cannot have more than RM2 million in debts, not declared a bankrupt, does not have a summons or court order and have sufficient disposable income.

"Even so, we will help but more in the form of advice. For example, if a borrower has more than one car, we may advise him to sell off a car," she said.

Koid said the main reason the agency provided financial education service was to help individuals learn to gain control of their finances and to promote  good credit practices.

"Through awareness and education on effective debt management, the agency hopes to reduce financial issues faced by Malaysian households," she said.

Koid said individuals with debt problems or difficulty in paying up their loans should not be embarrassed to visit the CCDMA as it could save them from being declared a bankrupt or have their property seized.

All services offered by the agency are free. — Bernama