THE government will do more to bring down household debts, which stand at RM486 billion out of the total debts of RM876 billion recorded last year.
Deputy Finance Minister Senator Datuk Donald Lim Siang Chai said the RM486 billion was a 12 per cent increase from the 2009 level.
"Household debts accounted for 55 per cent of the total debts last year while the rest came from businesses.
"We believe the debts accorded for businesses were low because banks were taking a safe approach. These banks should take (more) risks or else how are we going to move from a developing nation status to a developed nation status?"
Lim was speaking to reporters after launching the Bank Tech Asia 2011 conference and exhibition at the Kuala Lumpur Convention Centre (KLCC) yesterday.
"For this year, we are looking at bringing the number down and we foresee that it will only be a 5 per cent increase, thanks to all the measures that have been taken by the government and Bank Negara Malaysia lately," he added.
The measures include the new ruling that caps the number of credit cards owned by individuals, and a lower loan of 70 per cent for third home purchases.
"These are the many measures taken by the government. There will be more such measures introduced on a gradual basis," Lim said.
He added that such measures were pertinent so that the country will not end up with a big financial mess and high unemployement rate as in the US and other developed nations.
"We must learn from these countries, otherwise the same thing will happen here to us."
On another note, Lim said banks should come up with more niche products catering to specific industries.