This is a 70% increase from existing bankruptcy.

Group president Rosland Mohd Arif said more than 46,000 people have been declared bankrupt since the pandemic began after they defaulted on their payments.

He said hiking the OPR further would result in borrowers having to fork out more money to repay their loans and force those as young as 25 to go bankrupt.

“From the movement control order until now, more than 46,000 people have been declared bankrupt because they were unable to repay their bank loans,” he said in an Utusan Malaysia report.

According to Rosland, many of these debtors had car loans, personal loans and housing loans, and comprised of a large number of civil servants.

“Some had come under mental stress and had even been driven towards suicide. That should be sufficient to show that many people are not ready for an increase in debt interest rates,” he said.

Last week, Bank Negara Malaysia (BNM) hiked the OPR by a further 25 basis points (bps) to 2.25%. It had raised the rate to 2% from 1.75% in May – reportedly the lowest on record – following a 25 bps cut in July 2020, citing the severity of the global economic slowdown due to the pandemic.

Fitch Solutions’ research arm expects the central bank to raise the OPR further by 50 bps to 2.75% by the end of the year, owing to the depreciating ringgit, elevated commodity prices, and a pickup in domestic demand.