The RinggitPlus Malaysian Financial Literacy Survey (RMFLS) 2020 revealed that 46 percent of Malaysians spend exactly or more than what they earn, which is a three percent increase than last year.
The survey was done with 10,628 respondents who are made up of 51 percent male and 49 percent female. The respondents come from all over Malaysia Central region (27 percent), Northern region (21 percent), East Coast region (15 percent), Southern region (17 percent), and East Malaysia (20 percent).
Hann Liew, the Chief Executive Officer of RinggitPlus said respondents were of digital Malaysian adults who would be more reflective of the country.
According to the survey, personal financial habits have not improved since 2019. The percentage of Malaysians who cannot survive more than three months if they lose their jobs remains at 53 percent as the year before.
Hann also mentioned that the Movement Control Order (MCO) has a large impact on financial behavior. Nevertheless, Covid-19 has incurred an increase of contactless payments as 88 percent consciously use cashless transactions.
“Covid-19 is one of the catalysts for e-wallet adoption and 90 percent of Malaysians own e-wallet,” Hann highlighted.
The pandemic also accelerated the shift towards online transactions forming two biggest financial habits. First, 39 percent perform more transactions online, and second, 27 percent now realise the importance of an emergency fund.
Furthermore, almost 29 percent have just realised the importance of emergency funds since MCO.
The survey further pointed out that 1.2 million out of 7.7 million borrowers who opted for loan moratorium will need post-moratorium assistance but only 640,000 borrowers have actually applied for it.
“That means, 580, 000 borrowers will potentially be at risk of defaulting on their loans,” Hann added.
Lack of retirement planning among Malaysians also remain a concern. 68 percent believe that their EPF savings can only last them for less than 10 years while 70 percent believe their EPF savings alone is not sufficient for retirement. Despite that, 45 percent said that they have not started any retirement planning.
Unfortunately, more than 64 percent do not know what the Restructuring & Rescheduling (R&R) processes are. Hann emphasised that a lack of ability to retire comfortably comes from all ranges of salary if one doesn’t have financial management.
“The uncertainties drive home the importance of financial literacy for our tomorrow. So, if we ever find ourselves in today’s situation again, we’ll be more prepared- financially,” the CEO mentioned as he introduced the myRinggitHealth.
The new product of RinggitPlus is a private initiative that helps to bring awareness of debt and give tips to fix that. It gives a clear view of credit standing, tips, and recommendations for those who need advice financially.
Hann also shared his wishlist for the upcoming Budget 2021, where he expects an increase in fiscal spending and to disburse the financial aid more frequently for those whose income has been affected due to Covid-19 to sustain.