KUALA LUMPUR, Jan 31 — Local university UCSI has found that 73 per cent of 1,077 Malaysians aged between 18 and 40 are in debt.

The main reasons given for taking the loans were financial constraint (42 per cent), inflation (22 per cent) and luxurious lifestyle (21 per cent), according to the findings released today.

“This indicates that about three-quarters of Malaysian youths do not have sufficient capital for financial commitments.

“Although the number of borrowers among the youngsters is worrying, 83 per cent of them could pay their loans on time,” UCSI University’s head of research and postgraduate studies in its Faculty of Business and Management, Hassanudin Mohd Thas Thaker, said in a statement accompanying the survey results.


The UCSI survey found that 30 per cent of the loans were for vehicles, 28 per cent were for education, and 16 per cent were to buy houses.

“It is alarming to have vehicle loans on top of the pyramid as according to the Insolvency Department Malaysia, vehicle loans (14.39 per cent) have been the second causal factor of bankruptcy rate after personal loan (42.24 per cent) in the year 2022,” Hassanuddin said.

He saidthe research centre found that 73 per cent of youths are aware of the consequences of defaulting on their loans.


He added that this shows Malaysian youths do not apply for loans blindly.

The UCSI poll also found 58 per cent of Malaysian youths saying their financial status have been hurt post Covid-19.

“The 58 per cent who were affected by Covid-19 pandemic may be due to unemployment, unstable income and the increase in commitments as the pandemic has affected a lot of companies and individuals in Malaysia,” Hassanuddin said.

In seeking insights to the main causes of the youths’ financial constraints, UCSI said its survey points towards increasing living costs and insufficient savings (27 per cent) as the top two contributors, followed by lifestyle changes.

Hassanuddin added that the change in lifestyle may have been necessary to some of the youths because many things changed during the pandemic.

“One of the examples are university students’ transition from physical classes to online classes.

“This requires each student to have their own laptop and home Wi-Fi facility for them to join online classes which indirectly affected their daily financial well-being,” he said.

Another finding is that most youths are in debt as they do not have enough savings to begin a new chapter of their life which later causes them to apply for loans.

“Based on the outcome of this research, it could be concluded that the majority of the youths are having greater financial constraints due to the Covid-19 waves,” he said.

Hassanuddin said that inflation from the current financial situated in the country has also increased the number of borrowers among the youth in the country.

“There is always a mismatch between the demand and supply which leads to a continuous problem,” he said.