Debt Management Programme or Plan and Financial or Credit Counselling: An Analysis

Abstract

This study is to focus on Debt Management Programme or Plan (DMP) and Financial or Credit Counselling that provide assistance as well as advice for those suffering financial difficulties, of which has been largely associated with the rise in personal and household indebtedness in Malaysia, Thailand and Indonesia. This paper aims to examine on such programme or plan in Malaysia, carried out by Agensi Kaunseling dan Pengurusan Kredit (AKPK), an agency offering aid and guidance for individuals experiencing issues with their finances. It also seeks to discuss DMP and Financial or Credit Counselling equivalents in Thailand and Indonesia. The data are collected from secondary sources, derived from reports, research papers and articles from journals and reviews from social science journals. The findings of this study show that the components of DMP consist of one to one financial counselling, financial education, financial literacy and financial management. DMP is recognised as a voluntary debt repayment plan being alternative to bankruptcy. While DMP is vital in household financial management, credit counselling is also becoming more popular as concerns for major credit card challenges gradually grow. It is uncovered that education which includes life skills in financial management is essential for the present volatile economy. Proper financial literacy is also critical for younger generation, in order for them to possess the skills and information to handle their financial affairs in the future