AKPK: Avoiding the Debt Trap

The Credit Counselling and Debt Management Agency, or commonly known as Agensi Kaunseling dan Pengurusan Kredit (AKPK), is an agency set up by Bank Negara Malaysia in April 2006 to help individuals take control of their financial situation and gain the peace of mind that comes from the wise use of credit.

Their services include financial education on the responsible use of money and credit management skills, financial advisory, as well as a debt management programme to assist consumers in regaining financial control.

It is aimed to nurture more financially astute and resilient individuals and SMEs through its services.

Below is an informative article by AKPK on financial tips.

Avoiding the Debt Trap

Through a survey conducted on AKPK programme participants, the top credit facility restructured under Debt Management Programme is credit card (54.8%), followed by personal loans (31.9%), housing loan (4.6%), hire-purchase (4.4%) and other loans (4.3%).

It seems that credit card has become a common debt trap for youth nowadays. It is seen as a status symbol for the younger generation. However, it is important for you to first understand the features and its usage. When choosing a credit, it is necessary to:

  • Examine its fees, interest rates and rewards, if any. Comparing one credit card to another – even comparing one card issuer to another – is a smart way to ensure you make the best choice.
  • Limit the number of credit cards according to our needs and ability to pay. Ideally, having a maximum number of two cards is generally recommended.
  • Repay the credit card’s loan before the due date to avoid late payment charges.
  • Pay all amounts owed when you receive your credit card’s monthly statement to avoid interest charges. Don’t get into the habit of paying the minimum amount. Paying only the minimum amount each month will increase the time it takes to settle the credit balance. It will also increase the amount of interest on late payments. To settle the credit amount quickly and at a low cost, you should clear the credit balance as much as possible each month.

Through a survey conducted on AKPK programme participants, factors that have caused financial/debt problems and led individuals to participate in this programme included high cost of living (37.6%), poor financial planning (36.0%), failure or slowdown in business activities (11.4%), loss of job, retrenchment or loss of breadwinner (8.9%), high medical expenses (5.2%) and other reasons (0.9%).

The high cost of living plus no financial planning will further increase the risk of serious indebtedness. Debt problems do not recognise age or occupation but rather the lack of planning and managing finances due to the following reasons:

    1. Lack of financial knowledge – Lack of knowledge in understanding the financial terms used in loan agreements and not knowing how to analyse the status of one’s own affordability.
    2. Not prepared for emergencies – There is no plan to provide financial provision or protection in the event of critical illness, disability, property damage, and death (including changes in the (OPR) that can affect the amount of current loan repayment).
    3. Overindulging lifestyle – Following the latest trends and spending regardless of affordability to satisfy wants and desires such as obsession with luxurious vacations and accessories.
    4. Duped by get-rich-quick schemes – Wanting to get rich quickly without putting much effort leading to a decision to take a large loan but ending up not being able to pay it back.

Failure to repay loans will certainly land borrowers/customers in distress, especially if their banks have begun to take legal actions. The problem, if not addressed, could cause borrowers/customers to lose their homes, cars, and even be declared bankrupt. Therefore, act early when faced with financial problems. Borrowers/customers can take the 4A Steps – Acknowledge, Analyse, Act and turn to AKPK, Your Reliable Financial Partner.


  1. Acknowledge


The first thing borrowers should do is to acknowledge that they have an unmanageable or uncontrollable debt problem. When faced with such a situation, they need to confront the problem, not run away or try to avoid it without trying to find a solution. Such action will only cause the amount of debt to increase as no payment is being made. This will not solve the existing problem, in fact, it will increase the debt because the financial institutions/credit providers will charge interest, late payment fees and legal charges on the loan.


2. Analyse


After borrowers admit that they have an unmanageable debt problem, the next step is to try to deal with it. The first step is to analyse the existing debts. List out all their loans first, such as housing loans, hire purchases, personal loans, credit cards and so on. Moving on, borrowers need to calculate the total loan amount, the remaining period of each loan (how much longer will it be paid off), a list of all the financial institutions/credit providers/creditors that the borrowers are indebted to. Other than that, borrowers also need to list out debts made with other credit providers (other than banks) such as Courts Mammoth, Singer, and licensed credit companies as well as loans made with friends, family members and relatives. From here, borrowers will have an overall picture of their current debt situation, and at the same time, borrowers could compare it against their income sources.


3. Act


The next step to be taken by borrowers is to negotiate with all creditors in resolving the repayment of debts. Negotiations with banks/credit providers will give borrowers a chance to explain their current financial situation. The measure will also provide borrowers the chance to apply for loan/financing restructuring plan with the aim to reduce monthly instalment payments. There are a few measures banking institutions could take to reschedule borrowers’ loans/financing plans such as deferring and reducing monthly instalment payments, allowing borrowers to pay only interest on the loans, extending the term of the loan, and reducing interest rates, among others.


4. AKPK, Your Reliable Financial PARTNER


AKPK’s debt restructuring programme or better known as Debt Management Programme (DMP) for individuals, and Small Debt Resolution Scheme (SDRS) for Small and Medium Enterprises (SMEs) including micro enterprises are measures that can be taken if borrowers’ negotiations with their respective banks do not succeed. AKPK will try to assist in rescheduling the debts according to the current financial affordability of the borrowers/customers.

Increase your financial knowledge through services provided by AKPK, Bank Negara Malaysia, Securities Commission, Ministry of Education, EPF, PIDM and PNB through financial literacy courses such as cash flow management, credit management and risk management. AKPK offers three main financial services, i.e. Financial Education, Financial Advisory Services and Debt Management. AKPK provides financial guide through financial education modules at which cover the financial needs in four (4) stages of life, namely Tertiary, Entering Workforce, Starting and Raising Family and Retirement such as ‘Duit for Baby’, ‘Duit Together’, ‘Rumahku’ and others. AKPK’s financial education is focused on the individual phase from the age of 18 until retirement, with the concept of AKPK FOR ALL.

For those who need assistance on employment, medical support, upskilling and reskilling training, financial and mental support, AKPK also provides a one-stop centre referral service under Social Synergy programme. The service was introduced by PERKESO in July 2017 with AKPK as the main participating agency. Other participating governmental and nongovernmental agencies include MDeC, GIATMARA, TEKUN Nasional, AIM, MIASA and others.

AKPK plays three (3) main roles in helping individuals recover from financial problems and preventing them from becoming bankrupt. First, AKPK plays the role of an intermediary between credit providers and borrowers to help restructure outstanding loans/financing according to the current cash flow situation and the borrower’s affordability so that they can continue their repayments under the new terms. Second, AKPK also acts as an advisor to borrowers to guide them in managing their assets, debts and cash flow so that they can maintain a comfortable standard of living while continuing to repay debts for a better life and avoiding legal actions. Third, AKPK also plays a role of a public educator that provides awareness and education to individuals on good financial management to enable them to manage income, expenses and loans efficiently—without any arrears and, at the same time, avoid the risk of bankruptcy.

Essentially, whatever happens around us, we play a part in it. We can truly achieve what we set our minds to if we can control our financials and emotional state of mind. In AKPK, our financial education aims to nurture more financially astute borrowers/consumers who would take control of their finances and, at the same time, promote a good payment and repayment culture through the wise use of credit — the best prevention against bankruptcy. The correct public perception of financial wellness is crucial for people to take all financial education and advisory opportunities offered by AKPK or other legitimate institutions. For those already needing assistance, primarily via programmes like AKPK’s Debt Management Programme, mental readiness is crucial, and so is the resolve to improve one’s financial situation and make better decisions in the future. Customers can visit and submit the completed form for them to be contacted by AKPK’s financial advisor.


Agensi Kaunseling dan Pengurusan Kredit (AKPK) provides an avenue for current and potential borrowers/consumers―both households and Small & Medium Enterprises (SMEs) ―to enhance financial discipline via Financial Education, Financial Advisory and Debt Management Programme.

Financial Education (FE) programmes aim to nurture more financially astute borrowers/consumers who would take control of their finances, and at the same time, promote good payment and repayment culture through the wise use of credit. Increasing consumers’ financial literacy enhances their appreciation for prudence that serves as the basis for wealth accumulation, preparedness for financial uncertainties and comfortable retirement.

Financial Advisory (FA) assists individuals to work out budgets, among others, which will help them manage their money and expenses so as to improve their cash flow and net worth while helping them meet their loan/financing and credit obligations to avoid defaults and foreclosures. Financial advisory is available for households, and also for SMEs and micro-enterprises under AKPK Small and Medium Enterprise Help Desk (AKPK SME Help Desk).

Debt Management Programme (DMP) assists borrowers/consumers in improving and empowering their financial standing through the provision of a personalised debt repayment plan. The repayment plan helps to reschedule or restructure loans/financing such as housing and personal loans/financing, hire purchase and outstanding credit/charge card balances that are due to financial service providers under the purview of Bank Negara Malaysia and and other institutions include PTPTN, Tekun Nasional Berhad and several cooperatives participating in this programme. For SMEs that experience financing repayment difficulties with their financial institutions, AKPK offers a similar programme, i.e. Small Debt Resolution Scheme (SDRS) that provides repayment assistance on their existing financing facilities.

These services, i.e. Financial Advisory and Debt Management for households and SMEs are provided for FREE to individuals by AKPK, without the use of any third-party agent. AKPK services are available through an alternative online communication channel via Google form. Customers can visit our website and submit the completed form to be contacted by AKPK’s financial advisor. AKPK also provides financial guidance through financial education modules at

AKPK also uses its official social media @AKPKofficial on Facebook, Instagram and Twitter to convey information on financial management, including guides and links to the services provided. The public can use the medium provided, including contacting AKPK’s financial advisors directly online if they are interested in learning more about AKPK’s services.

Show More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button