49,000 civil servants facing bankruptcy over loans: Cuepacs

Bernama

KUALA LUMPUR: Over 49,000 civil servants in the country are facing bankruptcy due to poor management of loans, and taking on debts that are beyond their means to repay.

This was revealed by the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Datuk Azih Muda, who added that there have even been cases of civil servants forging their salary slips when applying for personal loans from financial institutions.

"This situation is getting more serious,” he told reporters after attending the Labour Day Seminar here, today.

He said the absence of a system that monitors loan applications by civil servants is among the reasons why individuals apply for loans beyond their means to repay, or taking on overlapping loans.

"(What is more), the government has (allowed) over 20 credit agencies to deduct from the salaries of civil servants who have applied for loans, without (any of the financial institutions) having to refer to one another. (Civil servants) can borrow from any financial institution by only bringing in their salary slips, and their salaries will be deducted every month.

“There are civil servants who initially apply for a loan with Institution A, then make subsequent applications with Institution B and C (all of which are approved)," said Azih.

In view of the alarming trend, Cuepacs is proposing that the government adopt the system being used by the Malaysian National Cooperative Movement (Angkasa), namely the Credit Reporting System (Spekar).

"This system (would allow Cuepacs to) detect data on salary deduction and the credit (history and rating) of civil servants. -- BERNAMA