21/03/2026

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SATURDAY | MAR 21, 2026

Strategic intermediation key to breaking debt trap cycle

Malaysia’s inflation stays contained but higher input costs pose risks: Kenanga IB PETALING JAYA: Energy subsidies and a stronger ringgit continue to anchor prices as Malaysia remains more resilient than many regional peers, but the escalation of the Middle East conflict complicates the outlook. Kenanga Investment Bank Bhd (Kenanga IB) said Malaysia’s status as a net energy exporter provides a fiscal buffer through higher dividends from Petronas and export revenues. However, global commodity shocks will still pass through via cost-push inflation. Kenanga IB said disruptions in the Strait of Hormuz threaten not only oil flows but also fertiliser supplies, both of which are critical for agriculture. “Higher input costs are likely to lift prices for staples such as rice, poultry and vegetables. While fiscal transfers continue to support demand, rising transport and farming costs will erode affordability. If producers pass on these costs to consumers, private consumption, Malaysia’s main growth engine, may soften. “This has led us to raise its 2026 inflation forecast to 2.1% from 1.9%,“ Kenanga IB said in a note. Malaysia’s headline inflation eased to a three-month low of 1.4% year-on-year (YoY) in February, largely due to base effects, in line with Kenanga IB’s forecast but below the 1.6% consensus, while on a monthly basis, prices rose 0.22% from 0.15% in January, amid continued increases in housing and miscellaneous expenses. Core inflation softened to a six-month low of 2.0% YoY in February from 2.3% in January, with monthly core inflation moderating to 0.1% from 0.4% in January, as a rebound in transport costs was more than offset by broad based easing across other components. Monthly price gains were driven by higher rents, jewellery prices and domestic airfares, partly offset by softer food prices. Housing, water, electricity, gas and other fuels inflation edged down to 1.1% YoY from 1.2% in January, despite a 0.7% MoM increase, reflecting higher rents, electricity costs and maintenance charges. Meanwhile, insurance, financial services, and miscellaneous goods and services rose to a record 6.9% YoY in February from 6.6% in January, driven by a surge in jewellery and watch prices amid elevated gold and silver prices. Transport remained subdued at -0.7% YoY but rebounded 0.2% MoM, driven by higher domestic airfares and diesel prices. Food and beverages eased to 1.3% YoY, its lowest since August 2021, with flat monthly prices as declines in food-at-home costs offset earlier gains, against a backdrop of uneven global inflation momentum and likely upward pressure in March from energy shocks. Kenanga IB said Bank Negara Malaysia (BNM) is therefore likely to keep the Overnight Policy Rate at 2.75%. “Energy export revenues provide near term breathing space, but the central bank faces a tougher trade-off as inflation pressures rise while global growth moderates. BNM must balance containing inflation expectations with preserving domestic activity. “We expect the central bank to tolerate moderately higher headline inflation, to safeguard growth, while a firmer ringgit helps cushion imported cost pressures. “In this environment, the policy rate will act mainly as a stabiliser against external volatility,“ Kenanga IB said.

and retained earnings rising sharply. According to the filing, most of the cash proceeds are earmarked for balance-sheet repair and operational flexibility. Eonmetall plans to allocate RM129.71 million to repay borrowings, a move expected to deliver annual pre-tax interest savings of about RM7.11 million. Another RM65.09 million has been set aside for working capital, while RM60 million is reserved for the acquisition of new business or assets, with no specific target identified yet. Estimated disposal-related expenses, including real property gains tax, amount to RM18.48 million. The transaction is subject to approval from non-interested shareholders, as well as regulatory and other conditions. Completion is targeted for the second half of 2026. Unlike traditional high-interest bridging loans, Ng said, the facility is used strictly to resolve specific credit hurdles such as high credit card utilisation or minor arrears that prevent banks from approving refinancing. “It’s not a debt product. It’s a strategic tool,” he said. “There is no interest charged, and we do not profit from the bridge itself. It is only provided when there is a realistic path to bank approval.” Once the bank loan is disbursed, the bridge is settled, allowing the borrower to transition from high-stress debt into a structured, lower interest facility. Looking ahead, Ng believes artificial intelligence (AI) can strengthen credit assessment if deployed ethically. Rather than relying solely on static credit scores, AI can analyse real-time spending patterns to detect early signs of financial strain. “AI should function as a guardrail,” he said. “If someone technically qualifies but cannot realistically afford repayments after essential living costs, the system should act as a stop button.” However, he cautioned that AI is only as ethical as the incentives behind it. Used to maximise approvals, it could simply scale harm faster. Borrower psychology is another overlooked factor, Ng said. Most loan applications are made under stress, where speed and certainty outweigh long-term cost considerations. Products marketed with urgency and fear based messaging may convert quickly but often lead to higher default risk and regulatory exposure over time. Scams and Buy Now, Pay Later (BNPL) schemes further complicate the landscape. Scam victims often withdraw from formal financial services altogether, eroding trust in digital banking. Meanwhile, BNPL can expand access for young consumers but risks overuse when perceived as risk-free. “True financial inclusion is not just about access,” Ng said. “It requires education, honest marketing and systems designed to protect consumers.” For fintechs and intermediaries, responsible scaling should be measured not by loan volumes but by whether borrowers’ financial positions improve over time, he said.

o Structural factors such as financial literacy gap, fragmented bank decision-making and fear-driven borrowing push Malaysian households into stressful monetary situation: BlueBricks executive director

to Malaysia’s fragmented banking system as another structural issue. Each bank operates with its own risk appetite and internal credit policies, many of which are not publicly explained. “One bank may overlook

Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

PETALING JAYA: Providing access to more credit is not the solution to Malaysia’s rising

household debt stress as structural gaps in financial literacy, frag mented bank decision-making and fear-driven borrowing con tinue to push consumers into deeper financial trouble. BlueBricks Holdings executive director and financial adviser Karl Ng ( pic ) said many Malaysians fall into debt traps not because they are irresponsible, but because they were never taught how money and interest actually work. “In school, we learn maths and science, but not how interest compounds or how debt grows,” he said in an exclusive interview with SunBiz .

minor telco arrears, while another will reject an appli cation outright,” he said. “Government or GLC employees may be viewed differently from private-sector workers, even with similar profiles.” This forces borrowers into what Ng describes as a “blind application” process, submitting multiple loan applications in hope that one will succeed. However, repeated inquiries

to monetise the asset at what the board views as an attractive price. At RM95 per sq ft, the sale price comes in slightly above the RM273 million market valuation assigned by independent valuer Savills (Malaysia) Sdn Bhd as of March 6. The board said that the premium reflects the land’s potential use for IT infrastructure, rather than ordinary industrial development. For Eonmetall, which built up its investment in the land over the 2020-2025 period at an original cost of about RM96.77 million, the disposal is expected to unlock significant value. The group expects to record a net gain attributable to shareholders of about RM57.82 million from the exercise. The transaction would also materially strengthen its balance sheet, with total borrowings falling to almost nil after repayment, and rejections can damage credit scores, creating a rejection spiral that makes future approvals increasingly difficult. BlueBricks positions itself as a strategic intermediary to address this gap. Instead of sending applications indis criminately, the firm conducts a detailed analysis of a borrower’s financial profile and matches it internally against the criteria of 10 to 12 banks before recommending where to apply. “The aim is to replace trial and error with strategy,” Ng said. “Sometimes a profile is not bad, it’s just the wrong timing or the wrong bank.” The firm emphasises cash flow improve ment rather than maximising loan size, recommending only amounts that address the financial issue while improving monthly take home pay. One of BlueBricks’ more distinctive tools is its short-term, 0% interest bridge facility.

PETALING JAYA: Eonmetall Group Bhd is moving to cash in on a large tract of industrial land in Kapar, Selangor, through a RM273.28 million disposal that would give the group a substantial gain, sharply cut borrowings and leave room for new investments. According to a filing with Bursa Malaysia, the land, owned by wholly owned unit Eonmetall Land Sdn Bhd, measures about 2.88 million sq ft and is being sold to WG Malaysia VIII Sdn Bhd, a company involved in IT-related infrastructure and hosting services. Berjaya Securities Sdn Bhd has been appointed as the principal adviser for the disposal. The site, a freehold vacant industrial parcel along Jalan Bukit Kapar Kuari, has been earmarked by the buyer as part of a wider information technology infrastructure development, giving Eonmetall an opportunity “For many, their first real financial decision comes with their first paycheque and often their first credit card.” What starts as a perceived milestone can quietly snowball. Minimum repayments allow interest to accumulate in the background, leaving borrowers owing far more than they initially spent. Ng noted that large financial institutions tend to prioritise risk management over recovery guidance when repayment difficulties begin, “When banks say no, borrowers are often left confused and stressed, without clear advice on what to do next,” he said, adding that desperation can drive some towards loan sharks, fast-cash schemes or unregulated lenders that worsen their situation. Beyond financial literacy gaps, Ng pointed

Eonmetall sells Kapar land for RM273m, eyes RM57.8m gain