KUALA LUMPUR, April 9 — More than 20,000 Malaysians were declared bankrupt last year, a 12 per cent increase from 2012 and close to double the numbers recorded in 2007, Minister in the Prime Minister Datuk Nancy Shukri told the Dewan Rakyat today.

Total numbers of Malaysians declared insolvent last year was 21,987 or 2,412 more than 2012 with those defaulting from car loans topping the list at 26.5 per cent, followed by housing.

The revelation comes just as Negara Bank raised alarms over household borrowing which spiralled to 86.6 per cent of the total value of the entire economy in 2013, up from just over 81 per cent in 2012.

“Yes based on this statistic there is an increase of (bankruptcy) cases,” Shukri said in a reply to Sungai Petani PKR MP Datuk Johari Abdul.

The total number of bankrupts from 2007 to last year is 253,265, she revealed, with those age 25 to 35 topping the list.

But the minister dismissed suggestions that rising insolvency among Malaysians are caused by inflation triggered by Putrajaya’s subsidy rollback, as suggested by Opposition Leader Datuk Seri Anwar Ibrahim recently.

“It is more of personal needs and not necessarily economic problems,” she said, citing the higher cases involving defaults in car and housing loans.

Defaults in personal loans took fourth spot on the list of causes of insolvency, she added.

Shukri said the government have redoubled efforts to tackle the problem including outreach programmes and counselling on financial management.

Statistics from the Malaysia Department of Insolvency (MdI) showed a 51 per cent increase in uptake for its services, rising to 39,279 last year compared with 26,021 individuals in 2012.

In addition, the number of bankrupts who paid their debts in monthly instalments had also increased by 4 per cent to 121,051 in 2013 compared with only 116,939 individuals in 2012.

“I have also made it my KPI to reduce bankruptcy,” she told the Dewan Rakyat.

Household debt has crept up steadily over the years as Malaysians grapple with rising cost of living.

Bank Negara said last month that the household borrowing spiralled to 86.6 per cent of the total value of the entire economy in 2013, up from just over 81 per cent in 2012.

The latest increase came even as household lending growth slowed in 2013, growing by 11.7 per cent after increases of 13.5 per cent in both 2012 and 2011.