KUALA LUMPUR, Aug 8 — The number of Malaysians becoming bankrupt and the number of companies closing down or winding up may increase when the current moratorium on bank loans ends, two economists said.
News reports have said a possible reason for the lower 2020 figure despite the Covid-19 pandemic’s economic impact is that the government had in 2020 increased the minimum debt levels from RM50,000 to RM100,000 before bankruptcy proceedings could be started through bankruptcy petition filing. This is applicable until August 31,Yeah suggested that the reduced number of bankruptcies filed last year could be due to the delayed effect of financial distress.
According to Dass, the closure of courts and insolvency offices in 2020 due to the movement control orders also slowed bankruptcy filings. “What can happen going forward is that those who are not eligible for the moratorium are likely to fall into the bankruptcy category if their outstanding balance is more than RM100,000,” Dass was quoted saying byDass also said borrowers who have unpaid debts below the RM100,000 figure would not be under bankruptcy, but would be blacklisted, withfurther noting that they would have difficulties seeking loans and may likely borrow from money lenders.