COVID-19 war: How financial know-hows can help in the new normal

Kuala Lumpur, 27 April 2020 – This month, many Malaysians who are eligible for the government’s Bantuan Prihatin Nasional have begun to receive the much needed financial aid, and many have also breathed a sigh of relief from the moratorium on loan payments. Several initiatives under the PRIHATIN Rakyat Economic Stimulus Package (PRIHATIN), such as the wage subsidy programme as well as the Employees Provident Fund’s (EPF) i-Lestari and e-CAP have also helped to alleviate the financial burden on employers and employees alike. All in all, these initiatives could mean that Malaysians could stretch their ringgit a little further, and, if the funds are used wisely, they could actually capitalise on these financial aids to turn it into something good and more meaningful for them and their family.

But this would require financial know-hows, something which they should ponder on to help them through the Movement Control Order (MCO) as well as in facing the challenges that lies in the post-COVID-19 future, especially for those who are at risk of losing their jobs or getting a pay cut by the employers. According to the EPF, 71.4 per cent of self-employed members have less than one month’s worth of savings in their EPF accounts, while 82.7 per cent of private sector employees have only saved enough to support themselves for less than two months.

Do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis

Credit Counselling and Debt Management Agency (AKPK) general manager Nor Fazleen Zakaria said these difficult times call for the people to identify personal skills that they could further leverage and generate more income when the COVID-19 pandemic ends. “For example, those who have a passion for cooking can consider doing it to earn extra income via various online food delivery applications.

“If they don’t know where and how to start reorganising their financial position, they can always come to us and we will assist them in coming up with a proper solution,” she told Bernama. AKPK is an agency set up by Bank Negara Malaysia to help individuals take control of their financial situation through financial counselling and advisory services, debt management programme and financial education.

Nor Fazleen said the agency’s goal is to equip individuals with financial knowledge so that they can manage their money wisely and achieve their financial goals, resulting in a positive lifestyle change. According to her, people in the M40 category who might not be significantly affected by the pandemic can use the financial aid to settle their credit card debts and be debt-free post-MCO. “But of course, they need to be disciplined enough to monitor their spending and not sign up for a new credit card,” she said.

The agency is also on hand to help those who are affected by a salary cut or layoffs, whereby they can reach out to AKPK by filling an online query form and wait for one to two days for the AKPK counsellor to contact them.

Nor Fazleen said in light of the MCO, they could contact the agency via its digital platform at https://www.akpk.org.my, adding that the AKPK has been aggressively engaging with the people via social media channels to disseminate information and creating awareness through online live discussions on a weekly basis.

Seeking financial advice is no longer a stigma for Malaysians

Nor Fazleen said Malaysians are more aware of the importance of financial education today, and this could be seen from the number of people turning to AKPK’s debt management programme (DMP). “If we look at the trend over the years, it is actually on the rise; we have hit the one million mark in terms of financial consultations to our client, and 313,000 people have enrolled in the DMP as at February 2020. “There is no longer a stigma attached to seeking for counselling as they want to settle their problems before it gets worse,” she said.

She said based on the DMP’s statistics as at end-February 2020, 12.3 per cent of customers reported that they needed to restructure their debts due to a failure or slowdown in business, and a further 8.8 per cent reported that they had lost their jobs or were retrenched. The AKPK offers various services to support financially distressed business owners and employees, namely financial review and counselling services, the DMP, financial education modules, the Voluntary Arrangement service to rescue potential bankrupts and the Lifestyle Change programme.

About 70.5 per cent of AKPK’s customers earn below RM4,000 per month, 15.3 per cent earn between RM4,000 and RM8,000 per month, and 14.2 per cent earn more than RM8,000 per month.

Adapting to the new normal

Assoc Prof Dr Anasuya Jegathevi Jegathesan, psychology programme director at Taylor University’s School of Liberal Arts and Sciences said historically, mental health issues tend to rise during an economic crisis. “But they can address it by changing their lifestyle. It is not about how much you earn but what your expenditure is like. So, plan your expenditure well. Be in charge of your financials,” she said.

She also suggested for families to engage in activities such as gardening, where they can turn their gardens into vegetable garden which could help to save on marketing costs. “We can become stronger if we work together. During the World War 2, all the races had worked together to support each other.

“I remember my grandparents used to have a huge cupboard where they stored rice and stuff, but if you push it aside, behind it was a space and the neighbours used to come and hide in it during the Japanese occupation. “This is what makes Malaysia, Malaysia. During this period of crisis, we should all come together and support each other to make sure that we are physically, financially and mentally strong together,” she concluded.

Beware of the scammer

Meanwhile, the government has urged the public to be extra careful and be alert with scammers taking advantage of COVID-19 pandemic and related government aids. Since the MCO came into force, police have opened 393 investigation papers (IPs) with total losses incurred reaching RM3 million as of March 25.

“Scammers have started making various ‘offers’ on social media platforms when the government announced to the public that they can withdraw their EPF savings. “They tricked victims into surrendering their identification cards and bank account details on the pretext of assisting them to withdraw their EPF savings,” said Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob recently.

Similarly, the Securities Commission Malaysia (SC) has cautioned the public to be on the alert for any individuals or entities trying to entrap them into investing in illegal investment schemes. The capital market regulator also warned the public against investing in unauthorised digital asset exchanges (DAX) operating in Malaysia, following an increase in the number of queries and complaints it has received.

– BERNAMA