MALAYSIANS generally do not have enough emergency savings in the event of long-term unexpected events.
A Bank Negara Malaysia’s (BNM) Capability and Inclusion Survey 2015 found that about 32% of Malaysians at most can only cover a week’s worth of expenses should they lose their source of income.
The central bank’s study also found that more than 75% Malaysians find it difficult to even raise RM1,000 of immediate cash money for emergencies. Additionally, a significant number of Malaysians, especially millennials, focuses on instant gratification – living for the moment and display short-sighted tendencies.
However, this pandemic has wreaked havoc on people’s finances – with salary cuts and loss of jobs or source of income. Many households are affected while people are becoming more concern and prudent when it comes to money matters.
A recent survey by leading credit reporting agency, CTOS Data Systems Sdn Bhd, has unveiled that Malaysians favour initiatives that would put more cash in their pockets in the coming year.
The survey involved over 3,000 consumers and was conducted to access the impact of the COVID-19 pandemic on Malaysians’ financial situation as well as ways in which they look to manage the economic challenges on their household.
In pre-COVID-19 times, factors such as “medical bills” or “education costs” tended to be of higher importance to Malaysians. However, job security fears have dwarfed these other important issues as the new year approaches.
The respondents said that the most important recent development was the ability to withdraw funds from their Employee Provident Fund (EPF) accounts as proposed by the Government under the Budget 2021 provisions.
Nearly 40% of respondents listed the i-Sinar scheme as the most relevant feature of the recently announced Budget. This was closely followed by a reduction in income tax and further loan repayment assistance as measures that consumers would most like to see realised.
Conversely, other incentives proposed for the public were not viewed as importantly with increases in medical facilities, job seeking allowance, and public transportation subsidies coming in at the lower end of the spectrum.
“When times are tough and people are uncertain of the future, having cash on hand becomes very important to consumers even if they do not require it immediately,” explained Group CEO of CTOS Digital Sdn Bhd Dennis Martin. “Being able to have extra funds in case of unforeseen circumstances is a valuable commodity.”
Despite majority of respondents still have their jobs at full pay, their biggest concern was putting food on the table. Meanwhile, the recent loan moratorium has given respondents breathing space during the toughest period this year as 69% have struggled to fulfil their monthly loan instalments.
“What we are seeing is that respondents are particularly sensitive about their financial health and any factors that could potentially threaten their financial well-being are worrisome to consumers as we move into 2021,” Dennis added.
Probably this is one of the silver linings found amidst the pandemic. – Dec 22, 2020