Bankruptcy is becoming a reality for more young Malaysians than many realise.
About 18 people are declared bankrupt every single day in Malaysia, and a growing number of them are not even 30 years old yet.
This alarming trend was highlighted by Senator Datuk Sivaraj Chandran during a Dewan Negara debate on Dec 9, where he revealed that nearly 60 percent of the spike in bankruptcy cases this year involved young Malaysians.
Nearly five thousand bankruptcies in nine months
According to Sivaraj, a total of 4,875 Malaysians were declared bankrupt in the first nine months of 2025, an increase of 5.7 percent compared to the same period last year.
Most of the cases involved large debts.
- 71.6 percent had debts between RM500,000 to RM1 million
- 20.6 percent had debts between RM100,000 to RM500,000
And the biggest culprit is not business loans or housing loans. It is personal loans.
Personal loans account for almost half of all cases
Reported by Astro Awani, Sivaraj said 45.1 percent of all bankruptcy cases came from personal loans alone, something he described as a sign that credit controls in Malaysia are far too relaxed.
He added that young Malaysians are being hit from two directions at once. On one hand, the cost of living keeps rising. On the other hand, credit is extremely easy to access.
This combination creates a situation where many youths start adulthood already weighed down by overwhelming debt.
“Without proper financial literacy and without responsible credit assessment systems, no amount of government incentives or grants can help if young people enter adulthood already trapped in heavy debt,” he said.
Two million highly educated Malaysians working in jobs that do not match their skills
Bankruptcy is not the only concern Sivaraj raised. He also highlighted that more than two million highly educated Malaysians are currently working in sectors that do not utilise their skills.
Many graduates are stuck in low income jobs far below their qualifications, with no clear career progression.
According to him, this mismatch is caused by an education system that produces too many irrelevant programmes, and industrial training periods that are too short to give graduates real world experience.
Calls for a complete overhaul of youth support systems
Sivaraj urged the government to take a hard look at the entire ecosystem that is meant to support Malaysian youths.
He said the government cannot continue celebrating budget announcements or talking about digital transformation when the basic systems meant to help young people build a life are still flawed.
“Youths are not asking for sympathy. They want a fair, efficient and responsible system. A system that does not trap them in debt or block their path to a better future,” he said.
He warned that if root causes are not addressed, every promise of transformation will remain only a slogan.
As long as these core issues are not fixed, the younger generation will continue to be victims of policies that do not reflect their real life struggles.”
What do you think about this? Share your thoughts with us in the comment section.
READ ALSO:
