Auditor-General's Report flags Finance Ministry for poor loan collection
The Auditor-General's Report 2/2026 reveals that Malaysia's Finance Ministry struggled with loan collection, recovering only 5% of RM9.273 billion in arrears last year. A significant portion of these debts has been outstanding for over six years, leading to substantial government losses through write-offs.
Why it matters
Inefficient public debt management impacts national fiscal health and limits the government's ability to fund future development projects.
PETALING JAYA: The Finance Ministry has been flagged for poor loan collection, some of which have been overdue for more than 40 years.
According to the Auditor-General’s Report Series 2/2026, the ministry collected only 5% of RM9.273bil in arrears last year.
"Overall, the collection of loan arrears was low, with only RM0.465bil, or 5%, of the arrears from the previous year successfully collected in 2025," read the report, tabled in Parliament on monday (Oct 5).
It added that as of the end of last year, loan arrears outstanding for more than six years amounted to RM5.024bil, or 62.1% of total arrears of RM8.084bil.
"The ineffective collection of loan arrears has necessitated loan restructuring as a recovery measure to help borrowers settle their repayments," it read.
In addition, new arrears amounting to RM16.15mil were recorded after loan restructuring, despite the loans having been restructured between one and five times.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in