Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Savings and Investment Behaviour of Bank Customers:
Survey Findings
M. Nasser Katib1, Nor Hayati Ahmad, Asish Saha, and Raj Yadav
This paper aims to investigate the savings and investment behavior of bank
customers in Malaysia. There is a perceptible change in the dynamics of the
savings and investment behaviour of the Malaysian households in the recent
years and is likely to gain further momentum in the future. As the country shifts
towards a higher-income status, it is envisaged that the financial needs of
consumers will become more varied and sophisticated, leading to increased
demands for more high-quality and innovative retail financial services. Changes
in the demographic structure are expected to be accompanied by changes in
the financial products and services by banks. A survey of bank customers in
three major cities of the Peninsular Malaysia was conducted based on an
interview using a set of questionnaire. A total of 1,107 respondents from eight
local commercial and Islamic banks were interviewed. Survey findings at the
aggregate level suggest that there is a rather even distribution of male and
female bank customers. Students account a visible percentage of bank
customers. Relatively younger generation and middle aged customers form the
dominant group. Majority of the responding customers are married individuals
who are either professionals or executives belonging to a nuclear family with an
average size consisting of 3 to 6 people with two earning members. Majority of
the households have more than one sources of income namely viz., salary,
business and rental income. The average monthly income of bank customers is
between RM2,001 to RM5,000; however, 20 percent earned between RM5,001RM10,000 and high income group (with average monthly income of above
RM15,000 per month) constitute 8.4% of the sample respondent of bank
customers. Majority of the respondents are found to be diploma holders or
undergraduates implying thereby that a typical Malaysian would prefer to join a
profession immediately after their tertiary education.
Keywords: Savings; Investment; Financial Services; Banking; Bank Customer
1. Introduction
The Malaysian economy is in the threshold of entering into an era of major
transformation under the Economic Transformation Programme (ETP) of the Government.
Malaysia's transition towards a high value-added, high-income economy is expected to be led
by the private sector in an increasingly more competitive environment. Competition will
contribute to a more efficient allocation of resources and the creation of greater economic
vibrancy and dynamism. The focus of the Government is expected to be in providing the
necessary preconditions and on continuously nurturing a competitive environment for the
efficient functioning of the market that will generate the appropriate incentives for private
sector initiatives. The target is to double income per capita to RM48, 000 (approximately
equivalent to USD16,000) by 2020. It is projected that a larger and more affluent middle
income population will support higher and more broad-based private consumption. It is
estimated that approximately a quarter of the more mature population will belong to the middle
1
Corresponding author - Associate Prof. M. Nasser Katib, Department of Banking and Risk Management,
School of Economics, Finance and Banking, Universiti Utara Malaysia, Kedah, Malaysia;
Telephone number: +604-9285038; Fax number: +604-9285761; E-mail: nasser@uum.edu.my
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
income group in 2020 (2007: 19%). The middle 60% of the population (20th to 80th percentile)
is projected to earn a higher real annual income (after adjusting for inflation) of RM36,000
(2007: RM20,400). This is expected to provide key support to the continued growth in private
consumption over this decade, raising the share of private consumption to about 60% of GDP
by the year 2020 (2010: 53%).
As one looks at the projected profile of the Malaysian economy in 2020, it is pertinent to
have a look at some key parameters of household spending and savings behaviour. In 2010,
the household debt level continued to expand at a faster pace of 12.5% reflecting a rebound in
consumer sentiment. The ratio of household debt-to-GDP remained almost unchanged at
75.9%. Debt coverage, as measured by the household financial asset-to-debt ratio, is more
than two times of household debts. Financial assets of households expanded at 13.1% (2009:
14.9%) for the year 2010. The growth in household financial assets was mainly attributed to
the strong performance of the equity market which bolstered market valuations and holdings of
equity by households. With one third of household financial assets in the form of equity,
households are susceptible to volatile swings in equity prices as observed in 2008. It is
pertinent to mention here that in 2010, the percentage of financial savings of Malaysian
households indicate that their Deposits with banking institutions and development financial
institutions account for 31% followed by Retirement savings with Employees Provident Fund
30%, Equity holdings 17%, Unit trust funds 16% and Endowment policies 6%. As at end-2010,
the ratio of financial asset-to-debt remained relatively unchanged at 238.4%, with more than
60% of the financial assets held in the form of highly liquid assets. Liabilities of households
grew at a slower rate relative to financial assets in 2010. The growth was led mainly by
financing for the purchase of properties and for personal use: 12.5% in 2010 compared to
9.4% in 2009. This has however, largely been offset by a corresponding increase in personal
disposable income at the aggregate level. The higher household debt level is also partially
attributed to increases in credit card transactions: outstanding credit card balances increased
by 15.2% to RM30.8 billion as at end-2010 to account for 5.3% of household debts. Similarly,
outstanding balances per credit card holder rose by 15.1% to RM9,516 as at end-2010. More
than half of credit card holders with revolving balances were those earning an annual income
of RM36,000 and below. There is therefore a perceptible change in the dynamics of the
savings and investment behaviour of the Malaysian households in the recent years and is
likely to gain further momentum during the present decade. As the country shifts towards a
higher-income status, it is envisaged that the financial needs of consumers will become more
varied and sophisticated, leading to increased demands for more high-quality and innovative
retail financial services. Changes in the demographic structure are expected to be
accompanied by changes in the financial products and services by banks. In order to spur
greater innovation and raise the level of financial service quality, country‟s central bank is
expected to encourage greater competition through progressive liberalisation of delivery
channels.
The Malaysian financial system has played an important catalytic role in facilitating the
economic transformation and growth of the Malaysian economy through the various phases of
economic development. This strategic role of the Malaysian financial sector will increase in
importance in the years ahead. It is envisioned that in the next ten years, the Malaysian
financial sector will increasingly be intermediating domestic, regional and international financial
resources and contributing to the efficient allocation of resources not only in the domestic
economy but also across borders. Within this decade, the financial system is expected to grow
at an annual rate of 8-11%, increasing the depth of the financial system to six times of gross
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
domestic product (GDP) in 2020 (2010: 4.3 times of GDP). Correspondingly, the financial
sector contribution to nominal GDP in 2020 is expected to increase to 10-12% (2010: 8.6%).
The contribution of financial institutions is also expected to strengthen, with assets of the
banking sector rising to almost three times of GDP by 2020 (2010: 2.4 times of GDP).
Notwithstanding the urge of commercial banks to grow through the inorganic route, the
fact remains that the very growth and survival of banks in an era of stiff competition will
depend upon their abilities to workout appropriate strategies not only to capture new business
through acquisition of new customer segments but also retain them in their portfolio. Ever
increasing demand from customer to have better products and efficient services at lower cost
coupled with lesser loyalty is making the proposition of strategy formulation more difficult and
challenging for the top management of banks.
The main objective of this study is to investigate the savings and investment behavior of
the bank customers in Malaysia. The secondary objectives are to assess the changing profile
of savings of the Malaysian households in physical and financial assets, to evaluate the
relative preference for various forms of financial savings and to study the investment behavior
of the various segments of population.
The paper is organized as follows. Section two provides a discussion of the relevant
literature review. This is followed by a description of the methodology which includes the
sampling in section three. Section four describes the key findings up to this point of the study.
Finally, in section five, a summary of the findings and conclusion are offered.
2. Literature Review
There is a plethora of literature on savings and investment and some of these studies
focus on the behaviour of savings and investment of the consumers. Saving2 and investment3,
two major economic indicators, play a significant role in achieving economic growth, self
reliance, mobilization of domestic resources and their efficient utilization will also undergo a
transformation with the development of the Malaysian economy.
Collins (1991) examined the saving behavior in nine Asian developing countries plus
Turkey since the early 1960s. The paper has two primary objectives. The first is to present a
variety of facts about saving and other key variables. The second objective of the paper is to
empirically examine the determinants of saving across these 10 countries and over time. The
paper reported that Malaysian saving is positively correlated with real growth rates. The paper
showed that the countries with the highest saving rates in the 1980s were also the ones with
the fastest real growth rates during 1960-84 and the ones that underwent a dramatic shift in
their age distributions-from over 40% under the age of 15 to barely 30%.
2
The word „saving‟ was clarified by Keynes (1936) as the excess of income over what is spent on consumption. In details,
saving also can be defined as a portion of disposal income which excess after consumption of consumer goods. Read more at
http://www.ukessays.com/essays/economics/an-analysis-of-saving-behaviour-in-malaysia-economicsessay.php#ixzz2UbTS0a1x
3
Investment as coined by Investopedia dictionary is an asset or item that is purchased with the hope that it will generate
income or appreciate in the future. In terms of an economic sense it‟s stated that an investment is the purchase of goods that
are
not
consumed
today
but
are
used
in
the
future
to
create
wealth.
(Retrieved
from
http://www.investopedia.com/terms/i/investment.asp)
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Ho (2001) study was aimed at identifying what the consumer wants from their bank and
to investigate if the bank has delivered or fulfilled their wants thus far. It is a descriptive
research that provides the banks with a sample of consumers' opinion of the level of
importance in their expectation and satisfaction towards the banks along with the degree of
performance of how the banks have fulfilled these expectations and met customer satisfaction.
Ang (2010) paper attempted to identify the key factors behind Malaysia‟s remarkable
savings performance. Drawing on the life cycle theory, the saving function is estimated by
incorporating other relevant structural features and institutional settings of the Malaysian
economy into the specification. Particular emphasis has been placed on the roles of financial
factors in mobilizing funds in the private sector. The results suggest that financial deepening
and increased banking density tend to encourage private savings. Development of insurance
markets and liberalization of the financial system, however, tend to exert a dampening effect
on private savings.
A study by Delafrooz and Paim (2011) was aimed at identifying the relationship
between selected demographic variables with savings behaviour and to determine the factors
affecting savings bahaviour among Malaysian employees and concluded that there are
significant differences in the financial behaviour according to age, education, income and
financial literacy. The study reported that literacy, income and marital status are most
influential predictors of savings behaviour.
Seong et. al (2011) explored the effects of psychological factors, such as, social
influence, attitude towards savings, and self-control on savers in Malaysia. Based on the
ordinal regression analysis, the findings shown that those who able to exercise self-control and
receive parental influence during childhood are tending to save more. However, attitudes
towards saving do not have significant impact on the saving patterns of savers. This study will
help retail banks to craft out better products and marketing strategies so that they can be more
competitive in attracting and retaining customers.
3. Methodology
Our study is based on primary data collected through a survey. A set of questionnaire is
designed specifically for this study. Questionnaire for this study has been developed on the
basis of previous studies on savings and investment behaviour. Questionnaire is divided into
three sections namely section (A) on customer profile; (B) on savings and investment
behaviour and (C) on service expectations of the customer.
The population is the customers of both commercial banks and Islamic banks. Data are
collected using selected bank customers in the three major cities in Peninsular Malaysia,
namely Georgetown, Kuala Lumpur and Johor Bahru, representing the northern, central and
southern regions, respectively. Presumably these cities will have more affluent population and
therefore, will have diverse financial needs and furthermore, their savings and investment
behaviour differs significantly from those in the semi-urban and rural areas. Eight local banks
and five Islamic banks have been selected to participate in this survey. However, two local
commercial banks and three Islamic banks opted not to participate. The sample will be
selected from customers who come to the bank premise, by using systematic and probability
sampling technique. The process of systematic sampling is to choose customers who have
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
departed the bank as they finish their banking businesses. 40 branches (approximately five
branches from each of the eight banks selected) and 30 customers from each branch,
providing us with a sample size of 1,200 respondents from each city and a total of 3,600
respondents from all the three cities. The data collection was conducted through an interview
using the questionnaire.
The survey was conducted for one month from mid-January to mid-February 2013. A
total of 1107 respondents were interviewed by specially trained enumerators during that
period. Descriptive analysis such as frequency tables and pie charts are used for data
analysis.
4. Analysis and Findings
Since our study is based on primary data, the results of the research provide us with a
new database on consumer behaviour particularly on their changing pattern of savings and
investment habits. This section reports the broad findings of the survey of bank customers
carried out for the study. The survey findings are reported in two sections; Section 4.1 deals
with the profile of the respondents, while Section 4.2 deals with the profile of savings of the
household in financial and physical assets both at the present time and the expected profile of
future savings. This section also deals with the savings, investment and consumption
behaviour of the respondents.
4.1 Profile of Respondent’s Household
A typical respondent is a male or female married professional or executives in the age
group between 25 to 42 years of age belonging to a nuclear family with an average household
size of 3-6 people and have two earning members. The annual average household monthly
income of a typical respondent is between RM2,001 to RM15,000 and is either undergraduate
or college diploma holder. About 9 percent of the respondents are postgraduates.
Table 1: Descriptive Statistics of Respondent’s Profile
Mean
Std. DeviaMinimum
Maximum
tion
Gender
1.45
0.498
1
2
Age
34.60
10.571
18
82
Marital Status
1.40
0.564
1
4
Occupation
3.37
2.180
1
8
Number of
Household
4.93
1.761
1
13
Members
Number of
Household
2.37
1.095
0
9
Members Working
Type of Family
1.21
0.410
1
2
Monthly House3.91
1.101
1
6
hold Income
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
n = 10584
Table 2: Frequency of Respondent’s Gender
Male
Female
Total
Frequency
Percent
580
478
1058
54.8
45.2
100.0
The research finding indicates that 31 percent of the respondents who are bank customers are in the age group of 24 to 30 years old. About 55 percent of the respondents are
male while 45 percent are females as shown in Table 2. About 26 percent of them are of 3140 years age and about 18 percent are in between 41 to 50 years. Only about 4.8 percent of
the respondents are of 51-56 years of age. The remaining are in the age group of above 56
years. This finding suggests that the age profile of the bank customers is skewed towards
younger generation and middle-aged group. About 64% of the respondents are married. 50%
of the respondents are either professionals or executives. This is in tandem with the finding on
the age profile of the respondents. It is also interesting to note that about 10% of the respondent households are self employed and 11% are students.
Table 3: Respondent’s Age Frequency
Frequency
Percent
134
330
317
183
74
20
1058
12.7
31.1
30.0
17.3
7.0
1.9
100.0
18 - 23 years
24 – 30 years
31 – 40 years
41 – 50 years
51 - 60 years
61 - 82 years
Total
Table 4: Frequency of Respondent’s Marital Status
Frequency
Percent
Married
671
63.4
Single
358
33.8
Widow/Widower
23
2.2
Divorced
6
0.6
Total
1058
100.0
4
A total of 1107 respondents were interviewed. However, after taking into account missing values only 1058 were used for
further analysis.
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Table 5: Frequency of Respondent’s Occupation
Frequency
Percent
188
340
156
105
43
53
112
61
1058
17.8
32.1
14.7
9.9
4.1
5.0
10.6
5.8
100.0
Professional/Managerial
Executive
Clerical/Non-Clerical
Self employed
Retired
Housewife
Student
Others
Total
Majority of households (52%) have 2 earning members, probably husband and wife of
nuclear family, and about 28% have 3 to 4 earning members in the family, probably the jointfamily which constitutes about 21 percent of the respondent households. Majority of the
households have more than one sources of income namely viz., salary, business and rental
income. It is found that about 27% of the respondents earned between RM2,001 to RM5,000
per month and 37% earned between RM5,001 to RM10,000. About 20% earned between
RM10,001 to RM15,000 and only 8.4% earned more than RM15,000. The finding reveals that
the respondents are mostly in the middle to lower income group.
Table 6: Frequency of Respondent’s Household Members
1
2
3
4
5
6
7
8
9
10
11
12
13
Total
Frequency
Percent
1
72
150
213
268
182
101
38
17
6
5
3
2
1058
0.1
6.8
14.2
20.1
25.3
17.2
9.5
3.6
1.6
0.6
0.5
0.3
0.2
100.0
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Table 7: Respondent’s Number of Household Members Working
0
1
2
3
4
5
6
7
8
9
Total
Frequency
Percent
1
171
546
181
118
26
9
2
3
1
1058
0.1
16.2
51.6
17.1
11.2
2.5
0.9
0.2
0.3
0.1
100.0
Education profile of the respondents, which is largely diploma holders (23%) and undergraduates (46%), indicate that member of Malaysian households prefer to work immediately after the completion of their tertiary level of education. Only 9 percent are postgraduate degree holders. It appears that there is lesser attraction of a typical Malaysian household towards
higher education which is probably due to the fact that job opportunities are more in the middle
management cadre.
Table 8: Frequency of Respondent’s Type of Family
Frequency
Percent
Nuclear Family
832
78.8
Joint Family
226
21.4
Total
1058
100.0
Table 9: Frequency of Respondent’s Level of Education
Primary Education
Secondary/High School
College Diploma
Undergraduate Degree
Postgraduate Degree
Total
8
Frequency
Percent
40
200
241
484
93
1058
3.8
18.9
22.8
45.7
8.8
100.0
Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
Table 10: Frequency of Respondent’s Monthly Household Income
Frequency
Percent
Less than RM1,000
19
1.8
RM1,001 to RM2,000
68
6.4
RM2,001 to RM5,000
284
26.8
RM5,001 to RM10,000
391
37.0
RM10,001 to
207
19.6
RM15,000
More than RM15,000
89
8.4
Total
1058
100.0
4.2 Profile of Present Savings of the Respondents
The profile of the avenues of financial savings of a Malaysian household indicates that
95% of the respondents have savings account, 41% have current accounts. 78% of the
respondents have Employee Provident Fund (EPF) and insurance (57%). In addition, 22% has
savings in unit trusts and mutual funds. About 56% have saved in the form of Insurance
products and about 11% of the respondents hold equity shares. Only 2% have savings in
private debt securities and 1.4% in Government bonds.
The profile of physical savings of the respondents indicates that 62% have savings in
the form of residential properties, 30% in the form of landed properties. Profile of physical
savings in other physical assets indicates that 82% own vehicles, consumer durables (25%)
and golden jewellery (42%). Majority (52%) of savings in residential property are below RM 0.4
million about 5.5% in the range of RM0.4 million to RM 0. 6million. Similarly it was found that
majority (24%) of savings in Landed property are also below RM0.4 million and 14 % in the
range of RM0.4 million to RM0.6 million. Present savings of Malaysian households in the form
of gold and jewellery majority is of value less than RM0.1 million. Art and artefacts have also
been recognised as a form of physical savings but only 4% of respondents own art and
artefacts.
4.3 Preference of Future Savings of the Respondents Financial Savings
The future savings preference of the respondents is in more than one form of financial
savings products/assets: 91% of the respondents said that they would keep some of their
future savings in savings account. This is inclusive of 30% respondents who would save 5060% of their future in this account and 14% would save 100% of their savings in savings
account (these are likely to be small savers). About 15% of respondents said that they would
keep 20 percent of their future savings in premium savings deposit account and about 6%
have said that they would keep between 25 to 30 percent in this product.
80% respondents have said that they would continue to save in EPF of which 27percent
have said that they would save between 40 to 50 percent of their future savings in EPF. 19%
have said that they would keep about 20percent of their future savings in unit trusts schemes;
similarly, about 14 % have said that they would keep between 40 to 60percent in this form of
financial savings. 15% of respondents have said that they would invest about 20percent of
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
their future savings in Equity shares and about 18% have said that they would invest 30 to
50% of their future savings in this form.
It is found that about 68% have said that they would buy insurance products from their
future savings; of which, about 25% said that between 20 to 25 percent of their future savings
would account for this savings avenue and about 24% have said that this would account for
between 30 to 50 percent of their future savings. 53% of the respondents have indicated that
they would have current accounts. This group is inclusive of 21%, who are probably in
„business‟, have indicated that 30-40% of their future savings will be in current account. This
result also implies that other respondents are holding current accounts for transactions
purposes. Only 36% of the respondents have indicated that they will keep their money in fixed
deposits, of which 14% have said that they would keep 20% of their future savings in fixed
deposits.
4.4 Preference of Future Savings of the Respondents Physical Savings
About 92 percent of respondents have said that they would invest in residential
property. Majority of this group (34%) have indicated that between 40 to 50% of their savings
in physical assets would be in residential property and about 22 percent have said that 100%
of their future savings in physical assets would be in residential building. 65% of respondents
have said that they would invest in landed property of which, 31percent have said that the said
investments would account for 40 to 50 percent of future savings in physical assets; similarly,
about 15% of the respondents have said that investment in landed property would account for
between 20 to 25% of their future savings in physical assets.
About 35% of respondents have indicated that they would save in the form of nonresidential property. In consonance of the findings as reported earlier regarding ownership of
vehicles, it is not surprising that about 89 percent of the respondents have indicated that they
would like to buy vehicles and 49 percent would invest in consumer durables. It is interesting
to note that about 12 percent of Malaysian household have interest in art and artefacts; about
18 % have said that 20-25percent of their future savings would be in this form. This mode of
savings preference is reflective of growing sign of prosperity of Malaysian household. About
74% of the respondents have said that they would like to save in the form of gold & jewellery of
which, about 26% have said that it would account for between 40 to 50 percent of their future
savings.
4.5 Pattern of Savings Behaviour
14.7% of the respondents have indicated that they would save between 21-30% of their
income; 37.5% would save between 11-20% and only 8.5% would save more than 31%. This
finding reflects that the average level of saving of a typical Malaysian household would range
between 11-30%. In other words, households who would save a high proportion (more than 30
percent) of their income as savings will be low. While reflecting on the time horizon in planning
savings by Malaysian household, it is found that about 47% have a short-term(one year or
less) perspective, 19 % have medium-term (one to four years) perspective, 18 % have medium
to long term( four to ten years) and about 29 percent have a very long term (more than ten
years) horizon.
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Proceedings of World Business and Social Science Research Conference
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The three major saving motives of the respondents are found to be „return‟ (46%);
„risks/emergency‟ (34%) and „liquidity‟ (20%).The major goals of savings of the respondents
are found to be for retirement (26%), children education (21%); dream house (19%),
acquisition of other properties (20%) and acquisition of business (12%). Children‟s marriage
accounts for 6.7% of respondents.
It is not surprising to note that only about 19 percent respondents have indicated that
they take independent decision regarding the household budget and household income.
Savings and investment decision of majority (53%) of Malaysian household are joint decisions.
4.6 Pattern of Investment Behaviour
The opinion profile of the respondents suggests that „Return‟ is “extremely important”
factor in the investment decisions in financial assets of the majority of households (45%); this
was followed by liquidity(26%) and “safety”(19%). Tax savings has „somewhat important‟
influence on the investment decision of the respondents.
In the investment decision in physical assets of households, „market price‟ of the asset
plays the most significant role; 43% of the respondents have said so. This was followed by
„location‟(36%). Availability of proper infrastructure also plays an important role in their
investment decision of physical assets.
It is interesting to note that majority (52%) of Malaysian household are „moderate risk‟
taker and another 43% are „less risk‟ taker; only 5.2 percent are ready to „High Risk‟. It
appears that Malaysian savers are quite knowledgeable in terms of differentiating investment
avenues; 84 percent respondents corroborated that they do not have difficulty in differentiating
investment avenues.
4.7 Pattern of Consumption Behaviour
On household consumption behaviour, we have listed seven basic necessities such as
food, clothing, medicine, fuel, education and utilities and respondents must provide a percentage for each of the item which will total up to 100 percent. We note that about 31% of the respondents spend about 20 percent of their monthly household expenditure on food, about 24%
spend 30 percent on food, while 16% spend 40 percent on food. Expenditure on clothing indicates that about 31% allocates 10 percent and about 42% would spend 20 percent for it. 39%
of the households spend 10 percent on medicine. Fuel consumption shows that about 69% of
the respondents spend between 10-20 percent of their expenditure on it. As expected, a lot of
consumers (72%) spend between 10-30 percent of their household expenditure on utilities.
About 76% of households pay monthly instalment for loans taken. The response profile
also reflects that „car loan‟ is the most dominant form of loans of Malaysian household followed
by „personal loan‟. The monthly instalment of various types of loans of the majority of
Malaysian households, who have taken loans like personal loan, car loan, housing loan,
business loan etc., is less than RM1000.
It is found that about 29% respondents spend 10 percent of their income on holidays;
about 21% spend 20percent and another 15% spend 30 percent of their income on holidays.
Though majority of households (67%) goes for holidays in domestic destinations, about 30%
percent of Malaysian household combine domestic and foreign destination for their holidays. It
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Proceedings of World Business and Social Science Research Conference
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is interesting to note that about 49% of the Malaysian household use their savings to pay for
holidays and another 28 percent have said that they pay for holidays from „extra income‟; 8.2
percent use credit card to make their payment for holidays.
In case of surplus of income over expenditure, majority (60%) of the Malaysian
households keep the surplus in savings bank, 20.5% in unit trust. 57 percent of the
respondents have indicated that they draw down their savings in case there is deficit of income
over expenditure. About 19 percent borrow from friends & relatives and 16 percent use credit
card to meet their deficit.
5. Summary and Conclusion
Survey findings at the aggregate level suggest that there is a rather even distribution of
male and female bank customers. Students account a visible percentage of bank customers.
Relatively younger generation and middle aged customers form the dominant group. Majority
of the responding customers are married individuals who are either professionals or executives
belonging to a nuclear family with an average size consisting of 3 to 6 people with two earning
members. Majority of the households have more than one sources of income namely viz.,
salary, business and rental income. The average monthly income of bank customers is
between RM2,001 to RM5,000; however, 20 percent earned between RM5,001-RM10,000 and
high income group (with average monthly income of above RM,15000 per month) constitute
8.4% of the sample respondent of bank customers. Majority of the respondents are found to be
diploma holders or undergraduates implying thereby that a typical Malaysian would prefer to
join a profession immediately after their tertiary education.
Majority of bank customers have savings account and a sizeable percentage also have
current accounts which is not surprising because there are multiple sources of income of a
typical Malaysian household which includes business. Financial savings of Malaysian
household is mainly distributed in EPF, unit trust/mutual fund schemes, insurance products
and equity shares. Physical savings of Malaysian household are mainly in residential
properties and landed properties. Savings in gold and jewellery is found to be at moderate
level. It is however interesting to note that arts and artefacts has also figured in the present
savings of households. The abovementioned savings avenue both in financial and physical
form would continue to be the preferred mode of future savings of Malaysian household.
The average level of future savings of a typical Malaysian household would range
between 11-30% of their income and only an insignificant percentage of households would
save more than 30 percent of their income. Though in the case of majority of household think
in terms of short-term while planning their savings, those having medium to long or very longterm horizon also constitute significant percentage of Malaysian households. It is found that
return, risks/emergency, liquidity are the three dominant form of savings motives of the
respondents and retirement, children education, acquisition of dream-house and properties are
dominant savings goal. Acquisition of business is also a significant savings goal. Savings and
investment decision of majority of Malaysian household are joint decisions.
It is found that return, liquidity and safety are three important drivers of investment
decisions of Malaysian households. Majority of households are either found to be moderate
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Proceedings of World Business and Social Science Research Conference
24-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
risk takers or less risk takers and they are found to be quite knowledgeable in differentiating
investment avenues.
Quite a significant percentage of Malaysian households pay monthly instalment for their
loans especially car loans followed by personal loans. It is found that a sizeable percentage of
household spend more than 20 to 30 percent of their income for holidays. Majority of the
Malaysian household drawdown their savings to meet expense for their holidays or they use
extra income for the said purpose. There is however household who use credit card to make
payments for their holidays. It is also found that in case there is deficit of income over
expenditure, Malaysian household borrow from their friends and relatives or use credit card to
meet the short-fall.
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