Combating Household Bankruptcy: Developing a New Integrated Financial Education Model for Malaysian (S/O 13585)

• Main Authors: Sawandi, Norfaiezah, Abu Bakar, Abu Sufian, Shaari, Hasnah, Amran, Noor Afza, Saad, Ram Al Jaffri
• Format: Monograph
• Language: English
• Published: UUM 2019
• Subjects: L Education (General)
• Online Access: https://repo.uum.edu.my/id/eprint/31929/1/13585-Technical%20Report.pdf; https://repo.uum.edu.my/id/eprint/31929/

Number of bankruptcy cases involving Malaysian that is rising from year to year has received growing concern from many parties including the government, regulatory bodies and NGOs (Utusan Malaysia Online, Feb 27, 2016 & Jun 26, 2015; Mstar, Jun 22, 2015). This trend is worrying as those declared bankruptcy is including youth aged between 25 to 40 years old (Utusan Malaysia Online, February 27, 2016). The incidents of bankruptcy amongst Malaysian can contribute to a financially distress situation amongst those involved which in the long term may affect, to a great extent, the economic stability particularly at the micro level. While there have been efforts undertaken by the government agencies and non-governmental organisation (NGOs) to curb these problems, recent evidence indicates that urgent action are needed to address the problems in the long term in which financial education has been seen as one of the vital means in order to equip people with appropriate financial knowledge that can help them to develop good financial/debt management. This study, hence, aims to develop a new integrated financial education model to strengthen the current financial education efforts undertaken by e.g. the government agencies. Three methods consist of survey, focus group, and semi-structured interviews were employed for data gathering. Data analysis was undertaken using (quantitative) statistical package and (qualitative) analysis. The developed model is expected to enable the government agencies to reach a wider audience and to deliver the content (financial knowledge) in a more effective and efficient means. It is expected that improved financial knowledge and level of awareness may contribute to a more positive financial behaviour. These expected positive consequences are in line with the 2011-2020 Financial Sector Plan (Area 8-Empowering Consumers) and the Securities Commission Inventor Education Blue Print. The key findings of the study, first, evidence suggests that the level of financial knowledge/literacy amongst Malaysian is arguably low as less than 50% respondents received high score. Second, the study found factors affecting financial behavior or decision of Malaysian are lifestyle, peer pressure, self control and financial knowledge. Meanwhile, it is observed that main factors that lead to poor financial/debts management are lack of financial knowledge and skills, lack of discipline in managing or paying debts, poor self-control, inability or not afford to pay loans/debts as the amount of payments are too much as compared to amount of income earned as well as greed which cause someone to be trapped in financial scams such as ponzi scheme. Finally, the study has developed the new integrated, holistic financial education model, which has three vital elements, that aims to create a financial literate or savvy society who are competent and able to apply knowledge, as well as have the right attitude, skills, knowledge, and habits to make effective financial decisions and are able to avoid being the victims of financial fraud or scam.