BATU KAWAN, Sept 19 — Fourteen of the 20 banking institutions providing hire-purchase financing had begun offering customers the reducing balance method as of Sept 18, said Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali.
He said the remaining six banking institutions are expected to complete the transition to the new method by December 31 at the latest, following engagement sessions with the banks.
“In total, there are 429 entities, comprising banking institutions and hire-purchase providers, registered with the Association of Hire Purchase Companies Malaysia (AHPCM),” he told reporters at the closing ceremony of the Consumer Festival (CONFEST) 2026 at Batu Kawan Stadium here today.
Armizan added that the ministry had set a target for 80 per cent of hire-purchase providers to offer financing in compliance with the Hire-Purchase (Amendment) Act 2026 by the end of this year.
He noted that hire-purchase providers that are not yet fully prepared have been granted a grace period until March 31, 2027, with full compliance required from April 1 next year.
According to Armizan, the amendments to the Act that took effect on June 1 introduced the reducing balance method and effective interest rate, replacing the flat interest rate and “Rule of 78” method.
“Under this method, interest is calculated based on the current loan balance, making early loan settlement more transparent for consumers,” he said.
CONFEST 2026, themed “Suara Kita: Kuasa Kita”, is organised by the Ministry of Domestic Trade and Cost of Living (KPDN) from Sept 17 to 20.
The 2026 National Consumer Day celebration aims to raise public awareness of consumer rights, protection and responsibilities.
The programme brings together consumer advocacy groups, government agencies and non-governmental organisations through a range of activities, including consumer-related competitions, a Fun Walk, a Fun Run and booths hosted by KPDN agencies and strategic partners. — Bernama
