MOHD FAIZUDDIN, ARIF FADILAH, MUHAMMAD HAFIZ

Young Malaysians, big money mistakes

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Malaysia has come a long way in promoting financial inclusion. With more than 96% of adults now having access to formal financial services, up from just 46% in 2011, the country is often praised as a model in Southeast Asia.

But here's the twist: despite this impressive progress, many Malaysians, especially the younger generation, still struggle when it comes to managing their money wisely and in line with Islamic principles.

Recent reports highlight the nation's inadequate retirement savings, with nearly half of Employees Provident Fund members under 55 holding less than $2,310 (RM10,000) in their accounts. Rising living costs, slow wage growth, and limited financial literacy worsen the problem, leaving many individuals financially vulnerable despite broad financial inclusion.

Moreover, whilst insurance penetration in Malaysia has climbed to 40%, participation in family takaful remains significantly lower at just 20%, raising questions about why many Muslims hesitate to adopt Shariah-compliant financial products. These gaps point to a deeper need to understand and improve Islamic financial behaviour amongst Malaysia's young adults.