The Finance Ministry recovered only RM465 million or 5% of RM9.27 billion in loan arrears carried over from 2024, leaving RM8.08 billion unpaid, says the Auditor-General’s Report.
PETALING JAYA: The Finance Ministry collected just RM465 million, or 5%, of RM9.273 billion in loan arrears carried over from 2024, leaving RM8.084 billion in unpaid loans, according to the Auditor-General’s Report Series 2/2026.
As at Dec 31, 2025, the RM8.084 billion in accumulated loan arrears involved 30 borrowers and 190 loans, with the debts outstanding for between one and 45 years.
The report said RM5.024 billion, or 62.1% of the total arrears, had remained unpaid for more than six years.
It also found that 66 loans worth RM4.637 billion had never been repaid since their repayment schedules began between 1981 and 2025.
Five borrowers, including three companies and two state governments, accounted for RM4.502 billion, or 97.1%, of these loans.
Separately, 39 loans worth RM4.766 billion had passed their repayment deadlines by between one and 42 years but had yet to be fully repaid.
Among the companies, Indah Water Konsortium Sdn Bhd (IWK) had the largest arrears at RM3.338 billion, followed by Keretapi Tanah Melayu Bhd (KTMB) at RM867.76 million.
Syarikat Perumahan Negara Bhd (SPNB) owed RM223.40 million, while National Feedlot Corporation Sdn Bhd owed RM181.95 million.
The report said poor collection had led the government to restructure some loans to give borrowers more time to repay.
However, RM16.15 million in new arrears were recorded even after some loans had been restructured between one and five times.
Some repayment periods had also been extended by up to 40 years.
The government also lost the potential to recover RM127.33 million in unpaid principal and RM450.99 million in interest and late-payment charges following loan write-offs.
The Auditor-General urged the Finance Ministry to act more swiftly when borrowers fall behind on repayments, including issuing demand notices and considering legal action against those who fail to pay without reasonable justification.
It also called for stricter assessments of borrowers’ ability to repay before approving new loans or restructuring existing ones.
The ministry said IWK’s restructuring application was pending approval, while SPNB had agreed to restructure its loans.
KTMB was also asked to submit a long-term financial recovery plan.
