KUALA LUMPUR, Oct 29 — The Finance Ministry said that household debt increased slightly to RM1.57 trillion in June this year, marking a slight uptick from the number at the end of 2023.

In a written parliamentary reply yesterday, the ministry said that 61 per cent accounted for housing loans, followed by vehicle loans (13.5 per cent), personal financing (12.4 per cent) and other loans such as purchasing non-residential property, credit card debt, securities and others.

"Household debt increased slightly from RM1.53 trillion at the end of 2023 to RM1.57 trillion at the end of June 2024, which is equivalent to 83.8 per cent of the GDP,” it said.

In 2023, the household debt was only 84.2 per cent of the GDP.

Despite the slight increase, the government said that the debt service ratio (DSR) still remained at a prudent level.

The ministry said the federal government and Bank Negara Malaysia will continue to implement the 2012 Policy Document on Responsible Financing, ensuring that individuals borrow within their financial means.

"At the end of June 2024, the median DSR of outstanding loans was 35 per cent, while the median DSR of newly approved loans was 41 per cent,” it said in the written reply.

Putrajaya also stated its commitment to ensuring that homes remain affordable and improving public transportation, highlighting that household debt primarily consists of home and vehicle financing.

Additionally, the government also is pushing for the Consumer Credit Act to be tabled as soon as possible to regulate non-bank credit providers such as Buy Now Pay Later providers.

Its regulation will reduce the risk of excessive indebtedness, especially among young and low-income borrowers.

The ministry also added that it remains steadfast in conducting awareness programs for the public to make sound financial decisions through its Financial Education Network and also by hosting a financial literacy month in October.