FINANCIAL literacy and management skills are needed for a sustainable and inclusive economic growth, said Prime Minister Dr Mahathir Mohamad.

In his keynote address at the launch of the National Strategy for Financial Literacy 2019-2023 today, he said household debt in Malaysia stood at 82.1% of the GDP.

This is higher when compared to high income nations such as Italy (40.3% of the GDP), Japan (58.1%) and the United States (76.3%).

Dr Mahathir said although the risk of household debt is under control and unlikely to affect the stability of the country’s finances, borrowers have been struggling to repay their loans.

“This is especially the case for borrowers whose income is below RM5,000.”

This is also evident with the increasing number of borrowers who have been placed under programmes by the Credit Counselling and Debt Management Agency, he added.

“It is understood that about 80% of this programme’s participants were too optimistic with their ability to repay their debt and afford the current cost of living, hence they have decided to borrow.”

The prime minister said it was critical for all stakeholders from the public and private sector, ministries, civil society groups and financial institutions to work together to improve financial literacy among the people.

“I believe such synergistic effort is important to step up financial literacy among the people.” – July 23, 2019.