Its Role and Mission
Agenda
BACKGROUND ESTABLISHMENT & ROLE STATISTICS ON COUNSELLING AND DMP
FINANCIAL EDUCATION INITIATIVES
2
Consumer Protection Framework - BNM
Access to Financial
Products and
Services
(access to basic banking
services, access to
financing)
Enhancing
Financial
Literacy
(consumer education
programme, school
adoption programme)
Depositors’
Protection
Avenue to seek
help & redress
Proper
Disclosure
(Malaysia Deposit
Insurance
Corporation)
(Complaint Unit@FIs
&CB, FMB,
LINK,AKPK)
(transparency &
disclosure requirement
for banking & isurance
products)
Fair Market
Practices
(anti trust regulations,debt
collection/repossession
issues, market conduct)
3
Background
Private
consumption
has
strengthened
Increase in
level of
household
indebtedness
Household
indebtedness
@ 74% of GDP
(End 2010)
Household
sector NPL
2.3%
(Dec 2010)
Despite prudent lending and borrowing, there are
cases where consumers are unable to meet financial obligations
4
Establishment
AKPK was set up by BNM to
provide credit counseling and
financial education as well as
debt management services to
individuals
5
Vision & Mission
Vision
To make Prudent Financial Management a Way of Life for
all Malaysians
Mission
To promote financial wellness among Malaysians by:
™ Empowering them to be financially savvy through comprehensive
consumer educational programmes;
™ Providing professional credit counselling and debt management
programmes to enable them to regain control of their finances.
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Objectives
More resilient household sector
Provides an avenue for
individual borrowers and
potential borrowers to
enhance financial
discipline via
counselling, education
and debt management
work-out
Sound and robust banking system
Facilitates debt
repayment efforts and
minimises incidence of
non-payment arising
from bad debt
management
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Principal Activities
All services are provided free of charge to all individuals.
Counseling and
Advice on Financial
Management
Debt Management
Programme
Financial
Education
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Counselling and Advice
„ Personal Budget
„ Cashflow Management
„ Post Counselling decision
„ Debt Management Advice
9
Debt Management Programme (DMP)
What is DMP?
„ On-line DMP (January 2011).
„ Help individuals resolve financial problems
with Financial Institutions (FIs).
„ Tailor made solutions.
„ Negotiate - no legal power.
DMP
Basic Qualifying Criteria for DMP
ƒ
Not a bankrupt.
ƒ
Positive net disposable income.
ƒ
Not under advanced legal action.
ƒ
Loan exposure of < RM2 million (US$0.6mil).
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DMP – Actions Involved
ƒ
Recommendations to FIs
ƒ
Secured /Unsecured Loans
ƒ
Waiver Considerations
ƒ
Stay of Legal Action
ƒ
Statutory Declaration
12
DMP - Collection
For Approved DMPs
ƒ Payments made into AKPK’s account
ƒ AKPK distributes payment to FIs
ƒ DMP terminated upon non-payment.
13
DMP – Benefits to the FIs
ƒ Revive default accounts
ƒ Reclassification to performing status
ƒ Yearly reviews (if any)
ƒ Collections by AKPK
ƒ Subsequent defaults – minimal
ƒ All waivers – conditional
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DMP - Statistics
Cases
2006
Counselling
6,837
1,588
2007
2008
2009
2010
Cumulative
%
25,320 41,447
36,848
30,010
140,462
100%
7,614
16,184
15,603
52,947
38%
Of which :
DMP
11,958
*Monthly DMP collections disbursed to FIs is RM 22 million (US$ 7 million).
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DMP – Statistics on Credit Facilities
16
* Combination – HL, HP & Credit Cards
** Others – Term Loan/ Personal Loan/Share Margin Financing
DMP – Reasons for Default
17
Financial Education
Objectives:¾
To raise overall level of financial literacy.
¾
To equip all segments of society with ability to manage
personal finances and make responsible decisions.
18
Financial Education
What does it entail ?
¾
Basic money management skills.
¾
Tailor-made programs to cater for various segments
of society.
¾
Including microfinance entrepreneurs
¾
Book-keeping skills
¾
Segregation of own vs business income/exp
¾
Budgeting/Cash flow
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Financial Education
Youths
• University / College Students
• National Service Trainees
Young Adults
Senior Citizen
• Retirees
• Pre-retirement
FINANCIAL
EDUCATION
• Young Parents
• Office Workers
• Government
Employees
Others
• Rural communities
• Minorities
• Poor
• Microfinance Entrepreneurs
Members of Associations /
NGOs Other Bodies
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Financial Education Initiatives
¾
Publication of “Money Sense – Getting Smart
With Your Money”
¾
Personal financial management guide book for young
adults.
¾
To date, 150,000 copies sold/distributed.
¾
Written in simple and easy to understand language.
¾
Adopted by 32 universities as a subject. (MQA)
21
Other Initiatives
¾
Publication of financial articles in daily newspapers.
¾
Briefings / talks at :
¾
¾
private and public organisations.
Specific target groups.
¾
Nationwide roadshows and exhibitions.
¾
Creation of social media website
www.speaksen.com.my
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Innovation in Financial Education – News Articles
Financial Talks, Briefings And Exhibitions
Innovation in Financial Education – Docu-Drama
13 episodes Docu-drama ‘RM’
Innovation in Financial Education – Online Reference
Innovation in Financial Education – E-Newsletters
Innovation in Financial Education – Use of Social Media
Latest Financial Education Initiative
¾
- Managing Your Debts Effectively
¾
A Financial Capability Program in collaboration with BNM.
¾
Launched by the Governor on 19th January 2011.
¾
is designed to equip young adults and potential
borrowers on how to manage their debts effectively and make
informed financial decisions.
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POWER! communicated via :
1. POWER! – The Handbook
• Enhanced with real life experiences;
• Templates;
• Self Assessments;
• Takeaways.
2. POWER! Class-room Sessions (4 hours)
• Interactive Exercises;
• Sharing of real life stories (AKPK’s experience);
• Q & As.
3. On-line Version (July 2011).
OBJECTIVES OF CHAPTERS
CHAPTERS IN Chapter 1 – Cash Flow Management Chapter 2 – Borrowing Basics
Chapter 3 – Wise Usage of Credit Card
Chapter 4 – Buying a Car
Chapter 5 – Buying a House
Chapter 6 – Managing Your Debts
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Innovation in Financial Education – POWER!
Thank you!
Mohamed Akwal Sultan
CEO, AKPK