Malaysia’s Gen Y are experiencing significant financial stress early in their life, with many living beyond their means and are trapped in emotional spending, a new study by the Asian Institute of Finance (AIF) has found.
The study, titled “Finance Matters: Understanding Gen Y – Bridging the Knowledge Gap of Malaysia’s Millennials,” surveyed more than 1,000 young professionals aged between 20 and 33 years in Malaysia. It found that the majority of respondents are relying on high cost borrowing.
- Only 28% felt confident with financial literacy.
- 38% reported taking out personal loans.
- 45% did not pay debt on time at some point.
- 47% engaged in expensive credit card borrowings.
- 70% credit card owners tended to pay just the minimum monthly payment.
- 75% have at least one source of long-term debt (car loans, education loans, mortgages).
The study was done to better understand the country’s Gen Y financial intelligence and attitude towards finance. The report was launched by AIF at the International Future Global Economics Development Conference at Chiang Mai University in Thailand earlier this week.
Malaysia’s Gen Y make up the largest consumer pool and have a high spending power, but they also lack confidence in financial literacy as the majority of Gen Ys surveyed (58%), rated themselves as having only average financial knowledge.
AIF chief executive officer Dr Raymond Madden said he hopes the study will inspire policymakers and financial institutions to seek innovative approaches that will make meaningful impact in the financial future of Gen Ys.
“Understanding the current financial literacy levels of Gen Ys can better equip organisations to understand this important demographic group,” he said.
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