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NPL Malaysia on the way up. How up?

Let’s look at NPL Malaysia today.

Referring to, “A nonperforming loan (NPL) is a loan in which the borrower is default and hasn’t made any scheduled payments of principal or interest for some time.” Click here to look at a full explanation yeah. Briefly, it meant that the lender (usually the bank) would have to expect that the loan may not be paid and they may have to make provision for it once this (NPL) happens. They could also restructure the loan repayments too.

During the COVID-19 pandemic, a moratorium was given instead of having a lot of loans suddenly turning into NPL. As a licensed auctioneer, I can safely tell you that if the banks forced the borrower into default during this COVID-19 pandemic period, that property they take back may be auctioned off at a price which is even lower than what the borrower owe. Thus the moratorium is considered a win-win situation to all. This includes the owners of similar properties, else, the auction price may also affect their property value too.

In Malaysia, Non Performing Loans are defined as loans overdue for more than 90 days. Let’s look at Malaysia’s NPL from 2010 all the way to Dec 2019. If you like to see even more, you can also refer to here.

Is Malaysia’s NPL on the way up. The answer is a firm yes.

Is this the highest we have ever seen. The answer is a firm no.

In 2008, there was a Mortgage Crisis which was triggered by that biggest economy of the world. We could see that it has also definitely caused some worry in the market. This situation has continued to become better from 2011 to 2012 to 2013 and have reached a low point in 2016 and then it has started to have an uptrend again, most probably is also because at the height of the property boom, many bought properties they struggle to afford in 2012 and when it’s completed in 2016, some of it turned into non performing loans for the banks.

NPL Malaysia


It’s always good to see the numbers in a wider context versus a very narrow view. Would another financial crisis be on the way? I have no idea but seriously, do not ask any economist as well because the only way they could know is by looking at history yeah. More importantly, did we manage our borrowings based on what we could afford. If we did, then chances are we are able to hold on for a while even if unforeseen circumstances do happen. Let’s manage this well yeah. Continue reading too.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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