Debt can be overwhelming and sometimes people borrow more money than they can afford to pay back. If you’re in this sort of financial predicament, consider getting assistance from Agensi Kaunselling dan Pengurusan Kredit (AKPK) or the Credit Counselling and Debt Management Agency. Read this article to find out more about their services.
Edited and updated by Anis Shakirah binti Mohd Muslimin
This article was first published in August 2019 and has been updated for freshness, accuracy and comprehensiveness.
Though it is easy to fall into debt, it’s not as easy - and can be extremely difficult - to get out of it. And if you don’t act fast, your debt may snowball into something larger and more serious.
But the reality is you can’t really avoid debt either; unfortunately in our society, debt is part of life - it helps us buy a house, a car, and even an education. Though living without debt is almost impossible, it is beneficial to know how to better manage your debt.
So find comfort in knowing that you are not alone when it comes to managing debt or even having debt piling up against you. In fact, you don’t have to struggle alone.
Many Malaysians may not know this but AKPK can help you better manage your debt. They are a good resource for those who are straddled with debt and are worried about not being unable to pay it off, especially with the end of the blanket moratorium. AKPK could also help rebuild your credit and offer financial advice for free!
To help us understand the services provided at AKPK, CompareHero.my spoke to Nirmala Supramaniam, Head of Module Unit Development at AKPK for better insights.
What is AKPK?
Known as Agensi Kaunselling dan Pengurusan Kredit (AKPK) or the Credit Counselling and Debt Management Agency, it was established by Bank Negara Malaysia (BNM) in 2006 as part of a Consumer Protection Framework under BNM’s 10-year Financial Sector Master Plan.
“AKPK helps individuals take control of their financial situation and gain peace of mind that comes from the wise use of credit,” Nirmala Supramaniam, Head of Module Unit Development at AKPK, told CompareHero.my.
The three main services that AKPK provides include:
- Financial education on the responsible use of money and credit management skills.
- Counselling and advice on financial management.
- Debt management programme to assist consumers to regain financial control.
“One of the latest schemes that we are assisting with is the Small Debt Resolution Scheme (SDRS), starting 1 September. This is something new to us this year,” she said. “Overall, AKPK has two main roles: one to aid households and the other to aid businesses.”
How well are Malaysians managing their debt?
Statistics from the Malaysian Department of Insolvency show that over 84,000 individuals have been declared bankrupt between 2015 and 2019. Uncontrolled credit card usage and excessive borrowings dragged these thousands of Malaysians, many of whom are married, into bankruptcy. The main causes of bankruptcy were personal loans (32.07%), hire purchase (21.53%), housing loans (12.57%), business loan (10.15%) and credit card (10%).
According to AKPK’s Financial Behaviour and State of Financial Well-being of Malaysian Working Adults survey in 2018, half of Malaysians admitted to having difficulties raising RM1,000 for emergencies. One in five working adults said they did not save in the past six months and almost three out of 10 individuals had to borrow money to buy basic needs.
Related: Know The Difference Between Good Debt and Bad Debt
From a demographic standpoint, according to AKPK chief executive officer Azaddin Ngah Tasir in a 2018 report, people aged between 30-50 years old – 85% of whom earn less than RM5,000 a month – are part of AKPK’s Debt Management programme. They are also among those who have serious debt problems.
But we wanted to point out that financial tools like personal loans and credit cards can be more useful than detrimental; they could also help build your credit - when used wisely and in moderation.
For example, when you dine out, rather than paying cash, you can get a 50% discount when you use a credit card. The key is to take advantage of the promotions offered and pay the amount due on time.
How can AKPK help you?
Besides being known for their Debt Management Programme (DMP), AKPK also provides financial education and financial counselling sessions to Malaysians. All of these services are available for FREE to individuals.
As a word of caution: If you are approached by any parties claiming to be “third-party agents of AKPK”, DO NOT engage nor solicit any advice from them. AKPK does not charge fees for consultancy services nor do they have any agents.
“We offer financial counselling, in particular to those experiencing high debt problems or facing financial issues because of debt. They will meet our counsellor, and if they are suitable, we will put them in our Debt Management Programme - where we will negotiate with the financier to get a restructured repayment plan which is affordable for the borrower,” Nirmala said.
“The other part of AKPK is our education and awareness efforts. We also want to educate people and create awareness on certain topics, ranging from things like why you should manage your finances to what you should be looking at before taking up a loan and what you should know when you first start working etc.,” she said.
AKPK provides education and awareness on different stages of a person’s life: post-education, employment and pre-retirement through workshops, training and online modules. Some topics will also be narrowed down to certain groups like women, for instance, Nirmala said.
Most recently, AKPK was tasked to take up the management of Small Debt Resolution Scheme (SDRS), which was established to provide assistance to small and medium enterprises (SMEs) facing business financing difficulties with financial institutions through the restructuring or rescheduling of existing financing with Bank Negara-regulated financial institutions.
“We apply the same method from our Debt Management Programme to SDRS where we will help businesses negotiate with banks,” she said. “We will still support businesses that have ceased operations, but they must have some form of income because it still requires businesses to pay. We are currently working on educational and awareness programmes for SMEs too.”
Eligibility for SME are as follows:
- Malaysian-owned companies (at least 51%) in all economic sectors.
- Meet the SME definition criteria:
- Number of full-time employees not exceeding 200; or
- Annual sales turnover, not more than RM50 million
- SME facing financial difficulties with financing from financial institutions.
- Applicable for business-related financing only.
What kinds of COVID-19 specific support does AKPK provide?
Similar to other financial institutions, AKPK, Nirmala said, has been adopting the various loan repayment incentives offered by financial institutions since the beginning of the pandemic COVID-19 in March 2020. It began from the blanket moratorium to the latest enhancements to the Targeted Repayment Assistance (TRA) announced in the Budget 2021.
The TRA refers to assistance that offers a three-month deferment of monthly repayment or six-month reduction of monthly repayment by 50% subject to the terms and conditions. These enhancements are in addition to those previously announced assistance for those who have lost their jobs, and for individuals and SMEs (microenterprises) whose incomes have been affected by the pandemic.
Over the last few months, she said AKPK has been promoting repayment assistance plans, especially for the targeted groups. “We want to keep reminding people to take quick action – to analyse and look at their debt because we don’t believe borrowers should review their debts at the very last minute. We also don’t want people to misuse available funds because it’s a crucial time for financial management across the board,” she said.
Besides the moratorium and targeted repayment, AKPK has also helped identify clients in need of assistance by reaching out to those affected by the pandemic - people who are within their database - and offer repayment assistance packages, as needed, similar to what the banks are doing.
“When you go to the banks, it’s actually an individual solution, but some clients may have multiple loans and issues or, maybe, they are not affected but someone else in their household is affected. We tell them to come to AKPK because we look at their debt problems from a holistic point of view. We will look at it from all levels, not just from one part of it,” Nirmala said.
What is the dedicated Agensi Kaunseling dan Pengurusan Kredit (AKPK) Micro-Enterprise Help Desk?
Commonly referred to as Micro Help Desk, the newly-launched Micro-Enterprise Help Desk is part of Bank Negara’s initiative to assist micro-enterprises to request for repayment assistance.
Alongside contacting banks, micro-enterprises can now also request for repayment assistance on their business loans with the banks through the dedicated Micro Help Desk at AKPK.
The AKPK financial advisors will provide free advice on repayment assistance and facilitate microenterprises to submit repayment assistance requests to their respective banks.
Micro enterprises can visit AKPK’s dedicated Micro-Enterprise website at or contact AKPK Call Centre at 03 - 2616 7766 from 9am to 4pm, on Monday to Friday, to make an appointment with AKPK financial advisors.
Debt Management programme (DMP)
Under this programme, AKPK will develop a personalised debt repayment plan for individuals who are unable to manage their monthly repayments to banks.
“Clients usually come to us through our awareness programmes or through banks who will refer them to us. First, they will meet a counsellor, who will run through the size of debts they have and work on restructuring the client’s plans before proposing it back to the banks. If the banks approve, then we will move them into our programme where we will monitor them,” Nirmala said.
Individuals will have a one-to-one session with an AKPK officer where they will calculate their financial commitments and then proceed to work out a restructuring plan.
To further illustrate this, Nirmala shared an example:
“Let’s say a person has five credit cards and owes a total of RM50,000 - the first thing that he’ll have to do under AKPK’s programme is to terminate the cards. The cards will then be converted to a term loan, and the tenure will be extended and the monthly payment will be reduced to according to how much the person can afford, as well as based on the approval of the financial institution,” she said.
“The borrower will then be required to only do one payment through AKPK, who will distribute the payments accordingly. After that, we will monitor him to ensure he progresses well,” she added.
AKPK will negotiate with banks on behalf of borrowers, and upon agreement from both the borrower and the bank, a DMP confirmation letter will be issued by AKPK.
Basic requirements for you to enrol to the DMP programme are:
- The individual has not been declared bankrupt.
- Is not in an advanced stage of litigation with banks.
- Has sufficient net disposable income after meeting one’s expenses.
- Has debt not amounting to more than RM5 million.
Read more about the DMP here and to apply for this programme, first fill-up the online application form for the Debt Management programme.
Reasons for joining the Debt Management Programme
Among the common reasons that lead participants to this programme, according to AKPK, include poor financial planning (36.6%), struggling with the high cost of living (34.9%), failure or slowdown in business activities (12.3%), lost job, retrenched or experience a loss in breadwinner (8.9%), high medical expenses (5.9%) and others (1.4%).
Since its establishment, AKPK has counselled 1.1 million people, and cumulatively, enrolled about 330,000 Malaysians into AKPK’s Debt Management programme (DMP), Nirmala said. The DMP has helped 29,876 individuals settle their debts, totalling RM 1.34 billion.
While under the AKPK programme, all legal actions against the client will be deferred or abeyed (moral suasion), hence giving clients a peace of mind to complete and settle their debts, without being “harassed” by collection agencies, Nirmala said. She also stressed that should there be a default in repayment, the financial institutions will continue to recover their debts.
Debt Management Programme participation breakdown
According to AKPK, those aged between 30 to 40 years make up 130,616 or the bulk of their applicants, followed by those aged 40 to 50 years (89,808), 20 to 30 years (43,336) and 50 to 60 years (41,072). Those aged 60 and above make up the least of all the age groups, filling up only 10,799 or 3.4% of the entire participants in the programme.
When it comes to financial background, low-income earners (make less than RM24,000 annually), account for 105,156 or 33.3% of the total of 315,963 participants. This is followed by 65,602 participants who earn RM24,000 to RM36,000 and 50,888 participants who earn RM36,000 to RM48,000, annually respectively. Surprisingly, those in the second-highest income bracket, RM96,000 to RM120,000 contribute to 37,180 of the participants. Here is a list of other earners:
- RM48,000 to RM60,000 - 33,978 participants
- RM120,000 and above - 8,923 participants
- RM60,000 to RM72,000 - 8,115 participants
- RM72,000 to RM96,000 - 5,789 participants
Clients who go through the programme also get to take advantage of Social Synergy, a collaborative initiative between AKPK, SOCSO, MDEC and GIATMARA. “For example, let’s say someone lost his job and he comes to AKPK thinking of how to pay his debt, we will try to link him up to SOCSO to see if he has any benefits and vice versa. And it’s all because we have this network,” Nirmala said.
Financial Counselling
AKPK has seen a slight decrease in people seeking financial counselling this year. Since its inception in 2006, it has seen through more than 1.1 million in counselling cases, of which 330,788 people have opted for DMP.
Malaysians can receive counselling and advice on how to manage their debt from AKPK who will help them identify and clarify options that are available to improve their financial situation.
The counselling and advice sessions are on a one-to-one basis. Currently, we encourage tele-counselling once an individual registers via our customer’s portal. One can get advice on budgeting, credit related issues, and money management.
For a full flow of how to register for DMP.
Financial Education
In line with AKPK’s aim to improve the financial knowledge of Malaysians, they carry out consumer education programmes, workshops, seminars and roadshows. AKPK also provides financial education based on the different scenarios that people will face through different life stages.
Moving forward, AKPK is looking to focus on educating Gen Y’s and Gen Z’s to increase their financial literacy.
Check out AKPK’s learning centre where you can find financial information catering to varied target audiences such as fresh graduates, those starting a family, individuals preparing for retirement, and more. AKPK also publishes easy-to-read financial guide books in English, Malay, Mandarin, and Tamil to increase one’s financial literacy. The publications can be bought for a minimal fee at AKPK’s branches.
When it comes to the best personal finance practices, especially with COVID-19 still rampant across the globe, AKPK, Nirmala said, holds onto four tenets, which are:
1. Acknowledging the current issue
The first step, Nirmala said, is to acknowledge the fact that only you can change your fate.
“You can read and do so many things related to personal finance - but if you don’t know or determine that ‘why factor’ or have that personal drive, you won't take it into action,” she said.
This is the step where you look at your finances and acknowledge what you have and what you want to achieve in life - focus on a goal. For example, if you never had savings, acknowledge that fact, and work towards improving it.
2. Analyzing the problem at hand
This is the stage where you list down your income and expenditure.
“This is your current cash flow. Analyze what you have and what you are gonna do with that money,” she said.
3. Acting correctly
This is the stage where you figure out what you can do in your current situation.
For example, if you need more savings, then it would be imperative that you try to save a bit more, Nirmala said.
Take the right action until it is manageable at a certain level, before moving to the next action of increasing or diversifying income, Nirmala said.
“Because you could end up losing any extra income you’re making if you don’t take the right actions, so you must take care of that first,” she said.
4. AKPK for advice
The last step to the four As is to go to AKPK for further advice.
How To Get Help
Due to the CMCO, however, the AKPK office has been limited to the public, but services are still available online. Borrowers just need to visit AKPK’s website www.akpk.org.my to book a date with AKPK’s counsellor.
AKPK has a total of 11 branches across Malaysia, to find the nearest to you click here or you can call the AKPK Infoline at 03-2616 7766.
(Please look out for AKPK’s Branches Operations updates during the pandemic).
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