18 bankruptcy cases reported daily in M’sia in 2025, 60% of cases involve M’sians under 30

Personal loans behind almost half of bankruptcy cases reported in Malaysia in 2025, mostly involving youths

Bankruptcy cases in Malaysia have surged, with personal loans accounting for almost half of the cases, and a concerning rise in the number of young people under 30 facing financial ruin.

According to Senator Datuk Sivaraj Chandran, there are an average of 18 bankruptcy cases reported every day in Malaysia.

Nearly 60% of these cases involve individuals under 30.

The statistic was highlighted during a debate on the Supply Bill 2026 at the Dewan Negara, Malaysia’s parliament, on 8 Dec, as reported by Astro Awani.

Almost 5,000 Malaysians declared bankrupt in just nine months

Senator Sivaraj revealed that between Jan and Sept 2025, a total of 4,875 Malaysians were declared bankrupt, marking a 5.7% increase compared to the same period in 2024.

Shockingly, the majority of these cases involved large debts, with 71.6% of individuals owing between MYR500,000 and MYR1 million (S$157,700 to S$315,400).

20.6% had debts between MYR100,000 to MYR500,000 (S$31,500 to S$157,700).

Personal loans identified as major contributor to bankruptcies

The most startling revelation was the source of these debts.

Contrary to common belief, the debts were not primarily linked to business or housing loans, but to personal loans.

In fact, 45.1% of the bankruptcy cases were caused solely by personal loans, which Senator Sivaraj described as a clear indication that Malaysia’s credit controls are too lenient.

The senator further highlighted the dual crisis young Malaysians are facing: the rising cost of living and the easy access to credit.

As a result, many young people are entering adulthood burdened with overwhelming debt.

Call for government intervention to support youth

In addition to the growing bankruptcy numbers, Senator Sivaraj pointed out that over two million highly educated Malaysians are working in jobs that don’t utilise their skills, with no clear career progression in sight.

Graduates are being forced into low-income positions far below their qualifications, exacerbating the financial strain on the younger generation.

He urged the Malaysian government to look into ways of better supporting the country’s youth, both in terms of financial education and career opportunities.

He emphasised the need for stronger credit controls and more targeted initiatives to help young Malaysians break free from the cycle of debt and unemployment.