A study on factors affecting bankruptcy in Malaysia: nonperforming loan, base lending rate, credit card debt and unemployment rate

Bankruptcy is a legal proceeding involving a person or business that is unable to settle outstanding debts. The reason being is the increasing trend of bankruptcy in Malaysia will essentially became a stumbling block for Malaysia to become a “high-income status nation” by 2020. Unfortunately, the problem of bankruptcy is still increasing from year to year and this has raised the interest to study what is some of the possible relevant factors that lead to the bankruptcy. The purpose of this study is to investigate the impact of non-performing loan, base lending rate, credit card debt and unemployment rate on bankruptcy. This study used 9 years of quarterly data that consists of 36 observations which is from 2010 until 2018. The method used for this study is Multiple Linear Regression. This study used E-Views software in order to run all the data collected to test and analyses the results for discussions. In this study, the results show that only one independent variable significant which is base lending rate. Based on previous studies, mostly agree that non-performing loan, base lending rate, credit card debt and unemployment rate plays their own roles in determined the conditions of bankruptcy.