Malaysia’s Gen Y in debt, living on the edge, survey reveals

Impulse-buying behaviour and easy access to personal loans and credit card financing have been blamed on an increase in Malaysians accruing debt at an early age, a survey finds. – The Malaysian Insider file pic, October 15, 2015.

Malaysian young adults are accruing debt at an early age, a survey by the Asian Institute of Finance (AIF)  has revealed, while some 40% are spending more than what they could afford.

The survey among Malaysian "Gen Y" respondents between the age of 20 and 33 were living on the "financial edge" and were facing money stress, with the majority living on high cost borrowing of loans and credit cards.

"Our study reveals that 75% of Gen Ys have at least one source of long-term debt and 37% have more than one long-term debt obligation. Long-term debt obligations include car loans, education loans or mortgages," AIF said in its report "Understanding Gen Y – Bridging the Knowledge Gap of Malaysia’s Millennials”, released today.

"To offset this debt, they are relying on high cost borrowing methods - 38% of Gen Ys reported to taking personal loans, while 47% are engaged in expensive credit card borrowing."

Their debt woes, AIF said, were the result of "impulse-buying" behaviour, besides easy access to personal loans and credit card financing.

"The impulse buying behaviour of this young consumer is tied to the basic want for instant gratification, which is exacerbated by easy access to the world of online shopping. As a tech-savvy generation, these young adults draw on technology for everyday tasks.

"This includes seamless online purchasing, which encourages the ‘buy-now-pay-later’ behaviour amongst this generation of consumers. Reliance on credit cards for online purchasing has further encouraged this behavioural trait," the report, targeted at banking, financial and learning institutions, said.

- TMI