— Malaysia’s largest lender urged authorities today to step up monitoring of personal loans, saying that it was becoming a cause for concern.

This comes as the nation’s household debt increased from 66.7 per cent in 2004 to 76 per cent in 2009, which is uncomfortably close to US levels prior to the 2008 financial crisis.

Malaysians are facing increasing financial pressures as salaries have not kept up with inflation and many turn to personal loans and credit cards to help fund living expenses.

The size of the money lending industry is reflected by the extent of advertising of personal loans, many with the interest rate of one per cent a month.

Some vernacular newspapers carry two to three full pages of advertisements for personal loans and stickers promoting money lending vendors also appear frequently pasted on lamp posts, vacant shoplots and the boots of taxi cabs. 

Figures provided by Bank Negara in March show that personal loans made up 15 per cent of the overall household debt composition.

“We need stronger enforcement on personal loans,” said Maybank CEO Datuk Seri Abdul Wahid Omar in a press conference following Maybank’s AGM here today.