Experian i-SCORE Analysis Reinforces the Urgency to Address Low Credit Health Awareness as Malaysian Consumers Gear Up for Longer Term Impact of COVID-19 Economy

Experian i-SCORE Analysis Reinforces the Urgency to Address Low Credit Health Awareness as Malaysian Consumers Gear Up for Longer Term Impact of COVID-19 Economy

Know Money, a holistic Financial Literacy Campaign, is launched today to empower Malaysians about the importance of credit health for better personal financial control and management

 

KUALA LUMPUR, 1 JULY 2021 - Experian Information Services (Malaysia) today released its analysis of consumer credit score trends and credit loans across different age groups for 5 quarters, from 1Q2020 to 1Q 2021, which spans the first and second Movement Control Orders (MCO). With a base of 5.7 million individuals, the analysis also highlighted the rate of change in delinquency by risk grades using Experian’s i-SCORE consumer credit score assessment.

 

Experian also announced the launch of Know Money Campaign as part of Experian’s ongoing initiatives to provide holistic education and empowerment to improve financial literacy in the country.

 

Experian i-SCORE is a consumer credit score in Malaysia. It is based on the statistical analysis of a consumer’s credit files to derive a numerical score ranging from 300 to 800. The scoring is typically used by lenders to ascertain the creditworthiness of an individual before approving or rejecting an application. A higher Experian i-SCORE indicates a lower credit risk to lenders.

 

Younger consumers make more credit applications while older consumers stay conservative in credit applications as impacted economy extends 

 

The Experian i-SCORE analysis studied credit facilities, such as credit cards, personal loans, overdrafts, mortgages, vehicle loans, government & education loans, etc. among those aged from 22 years to 65 years and above for the period of 1Q2020 to 1Q2021.

 

Figure 1: Change in Application Volume for Consumer Credit Loans by Age Group (1Q2020 to 1Q2021)

(Consumer Credit Loans: Credit Cards, Personal Loans, Overdrafts, Mortgages, Vehicle Loans, Government & Education Loans, and others)

 

The loan application volume decreased across all age groups when Malaysia went into MCO 1.0 in 2Q2020; most noticeably in consumers aged 51 and older (-56% & -57% respectively for the two most mature age groups). Malaysians aged 51 years and older continue to be conservative on new loan applications throughout 2020 and the first quarter of 2021. Many in this age group are adopting a wait-and-see approach and prefer to defer taking on new credit lines.

 

On the flip side, younger consumers aged 22-35 years old applied for more credit as the impacted economy wore on into MCO 2.0 at the start of 2021 (1Q2021). This was primarily driven by those aged between 22 and 28 years old, with an increase in loan applications at 37% in 1Q2021. A similar trend was also observed among those aged between 29 and 35 years old (22%), albeit moderate in comparison to the younger age groups.

 

Bank Negara Malaysia (BNM) highlighted that 47% of Malaysian youths have high credit card debt. Most of the bankruptcy cases were mainly due to the inability to sustain debt comprising instalment purchases, personal loans, and credit card debt. This is concerning as it reflects the level of financial literacy among Malaysian youths.

 

“The low level of financial literacy, especially awareness around credit health, has always been a challenge for Malaysian youths. Our latest Experian i-SCORE analysis reinforces the urgent need to educate Malaysians about the importance of credit health. This is critical as the uncertainties around the COVID-19 impacted economy persists, both as a nation and on an individual level. Experian’s Know Money Campaign is part of our long-term commitment to improve financial literacy in Malaysia. Through this campaign, we hope to continually educate Malaysians about the importance of credit health so they understand that it’s the first and vital step to better personal financial control and management in the long term,” said Dawn Lai, Chief Executive Officer of Experian Information Services (Malaysia) Sdn. Bhd.

 

Moratoriums have helped consumers in the weak credit score segment the most, but they may be at higher risk for delinquency as moratoriums lift in the future

 

Figure 2: Change in Credit Scores - i-SCORE Risk Grades (1Q2020 to 1Q2021)

 

i-SCORE risk grades categorise individuals into groups of weak, fair, good, and strong. The graphs denote the percentage change in the average i-SCORE of each Risk Rating as compared to the corresponding average i-SCORE during the pre-moratorium year in 2019.

 

The risk ratings have remained relatively unchanged for individuals rated in the fair, good and strong categories. However, the ‘weak’ rated individuals are most at risk for delinquency in general, as they are most often affected by poorer repayments. According to the Economic Action Council (EAC), more than 600,000 households from the M40 income group have slipped into the bottom B40 category as the COVID-19 crisis has delivered a major blow to the incomes of Malaysians. However, the various repayment schemes, (i.e., payment freeze, restructuring, targeted deferment), have given temporary score boosts and these are expected to normalise upon the ending of these initiatives. The banking sector’s moratorium measures driven by the government had helped with the normalisation of credit score performances, particularly for individuals with weaker scores.

 

The Association of Banks Malaysia (ABM) encourages borrowers to start repayment, if they are able to, as resuming repayments would reduce their overall cost of borrowings. For those who are still having challenges resuming repayments, they will have to proactively reach out to their bank(s) for further assistance. However, consumers with traditionally weaker scores may be at greater risk when Malaysia moves out of moratoriums. They would have to pay greater attention to how to navigate through managing credit more so than ever.

 

Delinquency rate change has been kept low due to the moratoriums, but consumers should take proactive measures to manage their credit health during prolonged volatility

 

Figure 3: Rate of Change in Delinquency Grouped by Risk Grades (3Q2020 vs 3Q2019)

 

Comparing 3Q2020 to 3Q2019, early delinquency rate (60 days past due) is seen to be lower, after both the blanket and targeted moratoriums. This is in line with a report by BNM, where it highlighted that with targeted repayment assistance measures that have remained in place, household impairments and delinquencies in the banking system only marginally increased after the end of the blanket auto-moratorium. Household loans in stage 2classified as “Underperforming” have increased to 7.3% (June 2020: 5.6%), reflecting increased credit risks among household borrowers.

 

Efforts have been made by financial institutions to help those significantly affected during the pandemic with the extension of the blanket moratorium. This coupled together with financial institutions tightening of lending criteria during the pandemic, have resulted in artificially low short-term delinquency rates. As we move out of moratoriums, consumers who had their delinquency rates artificially lowered would now need to be ready to manage their loans more proactively and improve their repayment performance – with the right knowledge, know-how and consistent tracking of payment performance.

 

In light of this, the Know Money Campaign plays a pivotal role in increasing credit health awareness and highlight the importance of maintaining good credit health in managing personal finance for the immediate period and into what may be a protracted and depressed economic environment.

 

“Personal finance has never been an easy topic to broach, but the situation that we are in today makes it increasingly complex to identity definitive indictors of consumer credit stress. It is of paramount importance that we help consumers and Malaysia to be more financially literate immediately and for the future. Strategic partnerships will be the key to achieving this. We look forward to working with various partners to achieve this ambition,” concluded Lai.

 

In conjunction with Credit Health Month in July, Experian is offering consumers a free personal credit report which includes their Experian i-SCORE and Central Credit Reference Information System (​CCRIS) data. In addition, it will provide 50% off all other consumer products throughout the month. To bolster continuing outreach on financial education, several free educational and engaging activities, in partnership with Agensi Kaunseling & Pengurusan Kredit (AKPK), iMoney and RinggitPlus, will be rolled out in phases in the coming months.

 

For more information about the Know Money Campaign and how to get your free credit report, visit the campaign page.

 

 

Analisis i-SCORE Experian Memperkukuhkan Keperluan Tangani Kesedaran Kesihatan Kredit Yang Rendah Bagi Pengguna Dalam Jangka Masa Panjang COVID-19

 

Know Money, kempen menyeluruh kesedaran kewangan, dilancarkan untuk memperkasakan rakyat Malaysia akan kepentingan kesihatan kredit untuk pengurusan dan kawalan kewangan kendiri lebih berkesan.

 

KUALA LUMPUR, 1 JULAI 2021 - Experian Information Services (Malaysia) hari ini mengumumkan analisis trend skor kredit pengguna dan pinjaman kredit pelbagai peringkat umur bagi 5 suku dari suku pertama (Q1) 2020 hingga suku pertama (Q1) 2021, yang merangkumi Perintah Kawalan Pergerakan (PKP) pertama dan kedua. Melibatkan sebanyak 5.7 juta individu, analisis tersebut turut menekankan kadar perubahan kelalaian pembayaran menerusi nilai risiko berpandukan penilaian skor kredit pengguna i-SCORE Experian.

 

Pengumuman pelancaran Kempen Know Money oleh Experian merupakan sebahagian dari usaha berterusan syarikat dalam memberikan pendidikan menyeluruh untuk memperkasakan pembangunan celik kewangan di negara ini.

 

i-SCORE Experian merupakan satu perkhidmatan skor kredit pengguna di Malaysia. Ia berdasarkan analisis statistik fail kredit pengguna bagi menghasilkan skor dari lingkungan 300 hingga 800. Lazimnya skor ini akan diguna pakai oleh pemiutang untuk menentukan tahap kredit seseorang sebelum meluluskan atau menolak sebarang pinjaman kewangan. Skor yang tinggi menandakan risiko kredit yang rendah kepada pemiutang.

 

Pengguna muda mencatatkan permohonan kredit lebih tinggi berbanding pengguna matang yang lebih konservatif kerana keterjejasan ekonomi berterusan

 

Kajian analisis i-SCORE Experian merangkumi perkhidmatan kredit seperti kad kredit, pinjaman peribadi, overdraf, gadai janji, pinjaman kenderaan, pinjaman pendidikan dan pinjaman kerajaan, serta lain-lain yang diambil oleh individu berumur dalam lingkungan 22 tahun sehingga 65 tahun bagi tempoh suku pertama (Q1) 2020 hingga suku pertama (Q1) 2021.

 

Rajah 1: Perubahan Jumlah Permohonan untuk Pinjaman Kredit Pengguna Mengikut Kumpulan Umur (1Q2020 hingga 1Q2021)

(Pinjaman Kredit Pengguna: Kad Kredit, Pinjaman Peribadi, Overdraf, Gadai Janji, Pinjaman Kenderaan, Pinjaman Kerajaan & Pinjaman Pendidikan, serta lain-lain)

 

Kadar permohonan pinjaman mencatatkan penurunan bagi semua peringkat umur ketika Malaysia memasuki fasa PKP 1.0 pada suku kedua (Q2) 2020; dengan kesan ketara bagi pengguna berumur dalam lingkungan 51 tahun dan keatas (masing-masing pada -56% & -57% untuk dua kumpulan paling matang). Pengguna berumur 51 tahun dan keatas kekal konservatif dalam permohanan pinjaman sepanjang 2020 dan suku pertama 2021. Kebanyakan mereka yang tergolong dalam kumpulan ini mengambil pendekatan tunggu dan lihat serta cenderung untuk menangguhkan sebarang permohonon kredit baru.

 

Manakala, pengguna lebih muda dalam lingkungan umur 22 sehingga 35 tahun dilaporkan membuat lebih banyak permohonan kredit akibat keterjejasan ekonomi berikutan PKP 2.0 pada permulaan (Q1) 2021. Permohonan ini melibatkan mereka dalam linkungan umur 22 dan 28 tahun dengan peningkatan permohonan sebanyak 37% pada suku pertama (Q1) 2021. Trend yang sama turut dilaporkan bagi mereka dalam lingkungan umur 29 dan 35 tahun (22%) walaupun dalam kadar yang sederhana berbanding kumpulan usia yang lebih muda.

 

Bank Negara Malaysia (BNM) menekankan bahawa 47% golongan muda Malaysia mempunyai hutang kad kredit yang tinggi. Kebanyakan kes bankrap berpunca dari ketidakupayaan menanggung hutang yang merangkumi pembelian ansuran, pinjaman peribadi, dan hutang kad kredit. Perkara ini amat membimbangkan kerana ia melambangkan kadar celik kewangan dalam kalangan golongan muda Malaysia.

 

“Kadar celik wang yang rendah, terutamanya kesedaran kesihatan kredit, merupakan cabaran lazim dalam kalangan golongan muda di Malaysia. Analisis terkini i-SCORE Experian mengukuhkan keperluan pendidikan mengenai kepentingan kesihatan kredit dalam kalangan rakyat Malaysia. Ini amat penting kerana ketidakstabilan ekonomi COVID-19 berterusan, akan membawa kesan kepada negara atau individu. Kempen Know Money Experian merupakan sebahagian dari komitmen jangka panjang kami untuk memperbaiki kadar celik kewangan di Malaysia. Menerusi kempen ini, kami berharap agar dapat terus memberikan pendidikan kepada rakyat Malaysia akan kepentingan kesihatan kredit supaya mereka faham bahawa ia langkah utama bagi pengurusan dan kawalan kewangan peribadi lebih baik buat jangka panjang,” kata Dawn Lai, Ketua Pegawai Eksekutif, Experian Services (Malaysia) Sdn. Bhd.

 

Moratorium membantu pengguna skor kredit rendah, namun mereka mempunyai risiko kelalaian bayaran yang tinggi jika moratorium tidak diteruskan pada masa hadapan

 

Rajah 2: Perubahan Skor Kredit – i-SCORE Nilai Risiko (1Q2020 hingga 1Q2021)

 

Nilai risiko i-SCORE mengkategorikan individu kepada kumpulan rendah, “Weak, Fair, Good dan Strong”. Graf menunjukkan perubahan peratus julat i-SCORE bagi setiap Kadar Risiko jika dibandingkan dengan julat i-SCORE lain ketika pra-moratorium pada tahun 2019.

 

Kadar Risiko kekal tidak berubah bagi individu yang dikategorikan dalam kumpulan sederhana, baik dan bagus. Namun mereka yang tergolong dalam kategori lemah secara umum berisiko bagi kelalaian pembayaran kerana dipengaruhi oleh kadar pembayaran lebih rendah. Menurut Majlis TIndakan Ekonomi (EAC), lebih dari 600,000 isi rumah dari kumpulan pendapatan M40 jatuh ke kumpulan B40 kerana krisis COVID-19 telah memberikan impak kritikal kepada pendapatan rakyat Malaysia. Namun begitu, kepelbagaian skim pembayaran balik (sebagai contoh pembekuan bayaran, struktur semula, penangguhan bersasar) telah memberikan peningkatan skor sementara dan diharapkan kembali normal pada pengakhiran inisiatif ini. Langkah-langkah moratorium sektor pembankan yang didorong oleh kerajaan telah sedikit sebanyak membantu dalam menormalkan prestasi skor kredit, terutamanya mereka dengan skor yang rendah.

 

Persatuan Bank Malaysia (ABM) menggalakkan bayaran balik oleh pemiutang yang berkemampuan, kerana ini akan membantu mengurangkan jumlah keseluruhan pinjaman. Bagi golongan yang masih mengalami kesukaran pembayaran, langkah proaktif kepada bank bagi permohonan bantuan amatlah disarankan. Namun, pengguna dengan skor kredit yang rendah berdepan risiko yang tinggi apabila Malaysia menghentikan moratorium. Ini kerana, golongan ini perlu memberi perhatian lebih untuk menguruskan kredit mereka.

 

Perubahan kelalaian pembayaran rendah kerana moratorium, namun pengguna harus mengambil langkah proaktif untuk menguruskan kesihatan kredit ketika ketidakstabilan berpanjangan

 

Rajah 3: Perubahan Kadar dalam Kelalaian Pembayaran berdasarkan Risiko Nilai (3Q2020 berbanding 3Q2019)

 

Perbandingan suku ketiga (Q3) 2020 ke suku ketiga (Q3) 2019, kadar kelalaian bayaran awal (60 hari selepas tempoh bayaran) direkodkan lebih rendah, selepas moratorium automatik dan bersasar. Ini sejajar dengan laporan oleh BNM, yang menekankan dengan langkah bantuan pembayaran balik sasaran yang dijalankan, tunggakan dan kelalaian pembayaran isi rumah dalam sistem perbankan mencatatkan peningkatan minima selepas tempoh moratorium automatik berakhir. Pinjaman isi rumah pada Fasa 2diklasifikasikan sebagai “Kurang Prestasi” telah meningkat kepada 7.3% (June 2020: 5.6%), memaparkan peningkatan risiko kredit dalam kalangan peminjam isi rumah.

 

Pelbagai usaha telah dilaksanakan oleh institusi kewangan bagi mereka yang terjejas teruk pada musim pandemik dengan lanjutan moratorium automatik ke moratorium bersasar. Ini ditambah dengan kriteria ketat pinjaman oleh institusi kewangan ketika pandemik telah membawa kepada penurunan kadar kelalaian pembayaran jangka pendek. Tatkala kita beralih keluar dari moratorium, pengguna dalam kategori kelalaian bayaran yang rendah di sebabkan oleh moratorium kini perlu bersedia dalam menguruskan pinjaman mereka agar lebih proaktif dan memperbaiki prestasi bayaran balik – dengan ilmu, cara yang berkesan serta penjejakan prestasi pembayaran yang konsisten.

 

Oleh itu, Kempen Know Money memainkan peranan yang penting bagi meningkatkan kesedaran kesihatan kredit di samping menekankan kepentingan mengekalkan kesihatan kredit yang baik bagi pengurusan kewangan peribadi untuk jangka masa terdekat dan dalam lingkungan keadaan ekonomi yang tertekan.

 

“Kewangan peribadi bukan topik mudah untuk dibincangkan, tetapi situasi kita pada hari ini menunjukkan pentingnya untuk mengenalpasti punca tekanan kredit pengguna. Ia amat penting untuk kami membantu pengguna dan Malaysia untuk menjadi lebih celik kewangan untuk jangka masa dekat dan panjang. Kerjasama strategik merupakan kunci kepada pencapaian ini. Kami berharap untuk bekerjasama dengan pelbagai pihak untuk merealisasikan cita-cita ini,” ujar Lai.

 

Julai ini, bersempena dengan Bulan Kesihatan Kredit, Experian ingin menawarkan laporan kredit peribadi secara percuma yang merangkumi data i-SCORE Experian dan Pusat Sistem Maklumat Rujukan Kredit (CCRIS). Tambahan, Experian juga akan memberikan potongan 50% kepada produk pengguna sepanjang bulan Julai. Untuk memastikan jangkauan pendidikan kewangan di kalangan rakyat Malaysia lebih menyeluruh, beberapa sesi pendidikan percuma serta aktiviti akan dilaksanakan secara berfasa pada bulan-bulan seterusnya dengan kerjasama Agensi Kaunseling & Pengurusan Kredit (AKPK), iMoney dan RinggitPlus.

 

Untuk maklumat lanjut mengenai Kempen Know Money dan cara mendapatkan laporan kredit percuma, layari laman kempen.

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Experian

By Experian 07/01/2021

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