KUALA LUMPUR: The Consumer Credit Bill 2025 (CCB) which is expected to be gazetted by year-end will soon require buy now pay later (BNPL) credit providers to be licensed.
This will be part of the new requirements of the CCB that will see credit providers that are presently unregulated by any authority to be soon regulated under the Consumer Credit Commission.
“The CCB is going for the second and third reading in the next parliamentary session from June to August.
“We hope to get the royal ascent in the fourth quarter of this year. And then we would want to gazette the act from an effective date at the end of this year.
“This is our plan which would depend on its passing in parliament,” the head of the consumer credit oversight board’s taskforce Abu Hassan Alshari Yahaya said at a briefing last Friday.
Bank Negara said Malaysia’s current consumer credit regulatory framework is varied and inconsistent as it is administered by several ministries and agencies under various credit-related laws.
The consumer credit industry regulation should be standardised for greater integration and comprehensiveness, the central bank said.
This will enhance consumer protection standards, making them more consistent and fair, it added.
Abu Hassan said the CCB is necessary to ensure credit providers and credit service providers carry out their operations responsibly with proper conduct.
“We have got a lot of complaints as well on how the debt collection agencies are doing their business and these are also currently not regulated as well.
“Many companies are dishing out credit facilities these days – sometimes there are marketing gimmicks or terms and conditions (T&C) which are vague,” Abu Hassan said.
“People are attracted to get credit but they don’t see the T&C and they just sign.
“After which they may fall into a debt situation where they are many things that they should’ve known prior to signing.
“There are many areas of conduct that needs to be strengthen in this industry – they must be responsible,” he added.
He said the law that is being tabled will highlight the areas of responsibilities of credit and credit service providers.
“They must be fit and proper. This service cannot just be done by any company.
So it requires a law in place. This will then bring confidence to the public to have an orderly, fair and transparent credit industry.
“This will be better for the industry and the country as a whole.
“The law will bring clarity on the conduct that’s expected of industry players,” Abu Hassan said.
BNPL’s credit exposure or outstanding balance was RM2.8bil at end-2024 and accounted for 0.2% of total household debt as of Dec 2024, Bank Negara’s statistics revealed.
Most BNPL users are low-income earners, who typically have spare money at the end of each month of which 73% fall within the B40 income group who earn less than RM5,000 per month, a survey by Bank Negara revealed.
“BNPL users exhibit good financial discipline and pay off debts in full with low delinquency rates: 88% made all repayments on time; 12% made late, but full repayments while less than 1% were unable to repay in full,” it said.
