Low-income households face a greater challenge than most in attaining a level of financial health as the bulk of finances is taken up with covering day-to-day expenses. According to an IB40 survey undertaken by the Blueprint Secretariat, only 16% of the IB40 have long-term savings though the majority of these will draw down the savings in cases of financial emergency. 81% of those surveyed do not have sufficient savings to support 3 months’ living expenses.
As of 2014, households earning RM3,000 a month and below had an indebtedness level of seven times their annual household income compared to three to four times for households earning RM5,000 a month.
Key Issues & Current Interventions
- Households earning below RM2,000 to RM3,000 a month would need particular support in routing any excess earnings to savings or in enhancing their savings levels (apart from increasing their income generating capacity).
- To increase the savings and wealth of B40 households, the 11th Malaysia Plan aims to expand unit trust schemes such as Amanah Saham Wawasan (“ASW”), Amanah Saham 1Malaysia (“AS1M”) and Amanah Saham Gemilang.
Moving Forward: Recommendations & Initiatives
To deliver on this target, this Blueprint aims to effect the following:
1. Seed and support savings habit
A RM500 mil seed fund will be established to seed the savings of IB40 households – particularly those below the poverty line – in relevant PNB unit trust schemes. The MIB Implementation Unit will also call for submissions from private, non-governmental and social sectors for innovative proposals to encourage and increase savings amongst IB40 households