Malaysian household debt will likely grow by 5% this year compared with 12% in 2010 due to measures introduced by the Government to factor in the increase.
Deputy Finance Minister Datuk Donald Lim Siang Chai said household debt stood at RM486bil last year, or 55% of the lending extended by banks.
Among the measures introduced by the Government to limit housing debt were tigtening credit card applications and mortgage rules for third and subsequent housing loans.
“The balance of the 45% loans were given out to businesses. There are concerns small and medium scale businesses were unable to get sufficient loans.
“The Government expects banks to help in funding projects involving investments of about RM1.4 trillion under the Economic Transformation Programme over a 10-year period in order to achieve Vision 2020,” he said at the launch of BankTech Asia 2011 Conference and Exhibition.
Lim said banks would benefit as expanded domestic economic activity would create potential financing opportunities of RM1.2 trillion.
“With over 90% of financing expected to come from the private sector, there is no doubt banks will be among the beneficiaries of the nation's economic advancement,” he said, adding that banks would also find opportunities from the enlarged scope of 10 Entry Point Projects for the financial services.
With high expectations placed on the financial services sector, Lim said it was incumbent on financial institutions to lead the way and help facilitate the next phase of Malaysia's development.