Batu kawan: 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 stated that the remaining six banking institutions are expected to complete the transition to the new method by Dec 31 at the latest, following engagement sessions with the banks.

According to BERNAMA News Agency, there are a total of 429 entities, comprising banking institutions and hire-purchase providers, registered with the Association of Hire Purchase Companies Malaysia (AHPCM). The ministry has set a target for 80 percent of hire-purchase providers to offer financing in compliance with the Hire-Purchase (Amendment) Act 2026 by the end of this year. Those not yet fully prepared have been granted a grace period until March 31, 2027, with full compliance required from April 1 next year.

Minister Armizan highlighted that the amendments to the Act, effective from June 1, introduced the reducing balance method and effective interest rate, replacing the flat interest rate and 'Rule of 78' method. This method calculates interest based on the current loan balance, making early loan settlement more transparent for consumers.

The announcement was made during the closing ceremony of the Consumer Festival (CONFEST) 2026 at Batu Kawan Stadium. 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 event aims to raise public awareness of consumer rights, protection, and responsibilities, bringing together consumer advocacy groups, government agencies, and non-governmental organisations through various activities, including consumer-related competitions, a Fun Walk, a Fun Run, and booths hosted by KPDN agencies and strategic partners.