The Auditor-General’s Report recommended legal action against borrowers who default on their loans without reasonable justification. (National Audit Office pic)

KUALA LUMPUR: The federal government managed to recover only 5%, or RM465.0 million, of the RM9.27 billion in outstanding loans in 2025.

“The ineffective collection of loan repayments has necessitated restructuring as a recovery measure to assist borrowers in settling their repayments,” the Auditor-General’s Report 2/2026 said.

It also found fresh arrears amounting to RM16.15 million even after the loans had been restructured up to five times.

The repayment period for the restructured loans was extended by 10 to 40 years.