Debt drowned Asia seeks relief. Going for Credit Counselling

Requirement of credit counseling occurs when your monthly payment exec 20% of your monthly income, excluding mortgage and rent.  Credit management has its own role in Asia region since it is the part of a larger world and a big portion of the investments are from the west.

Debt level in Asia is higher than that was in the past 6 or 7 years and hence credit counseling has so much to do in Asia Pacific. This may help the region from falling into a crisis which the west is experiencing now.

However the region of Asia has shown a positive attitude towards the credit counseling. Banks like Bank Negara have started their credit counseling departments. As we say prevention is better than cure, better we prepare to face the crisis. The idea of credit counseling is being tested and proved success in major economies. It’s time for Asia Pacific to go and get benefit out of this scheme.

Asian leaders keep the hope in public debt management plans. During the Third Asian Regional Public Debt Management Forum, it was firmly concluded that the emerging economies in Asia are going to get benefited from the good public debt management systems and the development of local bond markets, which will in turn support economic stability.

Bank Negara of Malaysia has set up its own subsidiary, Agensi Counseling Dan Pengurusan Kredit ( AKPK) with the purpose of counseling and debt management . This is a great step taken for the well being of the individuals, who is in debt threat. It teaches them financial literacy and to take control of their financial situation. To date, 140,462 individuals have attended its counseling sessions. Among those 52,947, after being counseled, are still unable to manage their debts. But the good thing is that AKPK, has assisted in restructuring the loans worth RM5bil. This record is as per the official reports.

The number of people who took the counseling was 30,010, among that 15,603 participated in debt management programs. The rate of participants in counseling and debt management programs in 2009 were 36,848 and 16, 184 respectively. But the figure was less compared to that in 2008. It was on the higher side with 41,447 attending the counseling and among those, 11,958 went through the debt management programs.

The report says that Malaysia household debt as November 2010, is RM577bil and its 50% consists of total loans and gross domestic product was totaled up to 74% 

Will credit counseling be a good tool to overcome the debt threat of Asia or will Asia go the Greece, Cyprus way? Well….. Only time will tell!!