Yeah Kim Leng, director of the Jeffrey Cheah Institute on Southeast Asia, said salaries of those under 35 may not have been sufficient to weather the pandemic, which saw multiple lockdowns and movement restrictions.
Those in this age group were likely to be in the early stages of their careers and family life, he pointed out.
Yeah was commenting on a report that Malaysians between the ages of 22 and 35 had the lowest credit rating score of any age group in the country.
According to the report by credit information company Experian, based on information from 5.7 million Malaysians, those aged 22 to 35 have an average credit score of less than 600, compared to an average of 620 across all groups.
Yeah said the cutback in salaries and loss of jobs during the pandemic could have placed them in this vulnerable position.
“This is all coupled with the rising cost of living, especially in urban areas.”
Yeah said while the bank loan moratorium and stimulus funds such as Pemulih, i-Citra and other aid under the national recovery plan were helpful, these were short-term solutions.
“For the long term, the government needs to put in place durable and sustainable policies aimed at raising incomes of those in this group.
“The government needs to encourage the below-35s to have greater labour mobility by running programmes for upskilling so they can shift to higher paying jobs, putting them in a better financial position,” he added.
He said another way was to encourage entrepreneurship by organising more entrepreneurship programmes, as well as provide financial help such as incentives, grants and loans for small businesses and startups.
“Without long-term plans, the overall economy will be constrained by the limited ability of those aged 22-35 to increase private consumption due to their low borrowing capacity.”
Financial planner Robert Foo cautioned that in the long term, low credit scores may badly affect the future of this group.
“As they approach family life, their financial needs will expand. Children’s education isn’t cheap.
“On an individual level, they need to start planning – consider what to borrow, when to pay it off, and whether they can pay it off,” said Foo, who is co-founder and managing director of MyFP Services.