KUALA LUMPUR, March 12 — Buy now, pay later (BNPL) use among Malaysian youth raises concern as those aged 30 and below make up about 40 per cent of BNPL transactions in the country, Deputy Finance Minister Liew Chin Tong said.
He said although BNPL accounts for only a small share of household debt, its rapid adoption among younger consumers, including for daily necessities, reflects deeper wage challenges and is a cause for concern.
“First, we need to manage the risks posed by unregulated credit providers, as BNPL providers, debt collection companies and other operators outside the traditional financial system are not covered under existing laws, creating risks such as unfair terms, hidden fees and aggressive debt collection.
“Second, oversight of the credit industry is currently spread across multiple ministries and agencies, each operating with its own mandate and standards, and this fragmentation increases the risk of inconsistent enforcement and leaves room for irresponsible behaviour,” he said at the “Navigating Malaysia’s New Credit Landscape” event here today.
Liew said the government and Bank Negara Malaysia (BNM) have over the years introduced measures to prevent households from becoming overly indebted and ensure fair treatment of borrowers, but emerging risks have necessitated the Consumer Credit Act 2025 (CCA).
“This is a major milestone for Malaysia’s credit landscape as the Act introduces a more coordinated and consistent approach to regulating consumer credit, complementing existing laws and filling important gaps,” he said.
The CCA, passed by Parliament in 2025, was gazetted on Dec 31, 2025 and took effect on March 1, 2026.
Liew said a key component of the CCA is the establishment of the Consumer Credit Commission (SKP), which will regulate six currently unregulated sectors, including BNPL providers, leasing and factoring companies, debt collection agencies, impaired loan buyers and debt counselling and management agencies.
“The Act also sets up an advisory committee to improve coordination between ministries and agencies and ensure consistent enforcement,” he said.
Liew said the reforms reflect the government’s commitment to ensuring fairer outcomes for consumers and a more level playing field for industry players.
““The recent amendments to the Hire-Purchase Act (HPA) 2025, which remove outdated interest calculation methods in favour of more transparent ones, further demonstrate our seriousness in this regard,” he said.
He also reminded that licensing for credit providers and registration for credit service providers will begin on June 1, 2026, with a six-month transition period to support smooth implementation.
“The SKP has already begun operations on March 1, 2026 and is focusing on issuing the necessary standards for authorisation and conduct regulation, as well as ensuring the licensing and registration processes run smoothly,” he said.
Liew added that credit reporting agencies (CRAs) play a crucial role in strengthening Malaysia’s credit system, as they provide reliable credit data and insights that help lenders make more accurate decisions while enabling consumers to better understand and manage their financial health.
“While the Central Credit Reference Information System remains the main source of banking-related credit information, CRAs have the potential to expand access to non-bank credit data, helping reduce information gaps and prevent over-indebtedness.
“I encourage CRAs to continue innovating, adopt new technologies, and strengthen data quality, cybersecurity and interoperability across the ecosystem,” he said. — Bernama
