Kuala lumpur: Buy now, pay later (BNPL) use among Malaysian youth raises concern as those aged 30 and below make up about 40 percent of BNPL transactions in the country, Deputy Finance Minister Liew Chin Tong said. He noted that while BNPL constitutes a small share of household debt, its swift uptake among younger consumers, including for daily necessities, exposes deeper wage issues and warrants attention.
According to BERNAMA News Agency, Liew emphasized the need to manage risks from unregulated credit providers, highlighting that BNPL entities and other non-traditional financial operators are not currently covered under existing laws, which may result in unfair terms, hidden fees, and aggressive debt collection practices. He also pointed out that oversight of the credit industry is dispersed across multiple ministries and agencies, leading to inconsistent enforcement and potential irresponsible behavior.
Liew stated that the government and Bank Negara Malaysia (BNM) have taken steps over the years to prevent households from becoming overly indebted and to ensure fair treatment of borrowers. However, emerging risks have prompted the introduction of the Consumer Credit Act 2025 (CCA). The CCA, which was passed by Parliament in 2025, was gazetted on December 31, 2025, and came into effect on March 1, 2026.
A significant feature of the CCA is the establishment of the Consumer Credit Commission (SKP), tasked with regulating six currently unregulated sectors, including BNPL providers, leasing and factoring companies, debt collection agencies, impaired loan buyers, and debt counseling and management agencies. The Act also forms an advisory committee to enhance coordination between ministries and agencies to ensure consistent enforcement.
Liew remarked that these reforms underscore the government's dedication to achieving fairer outcomes for consumers and ensuring a balanced competitive environment for industry participants. Recent amendments to the Hire-Purchase Act (HPA) 2025, which eliminate outdated interest calculation methods in favor of more transparent practices, further demonstrate this commitment.
He reminded that licensing for credit providers and registration for credit service providers will commence on June 1, 2026, with a six-month transition period to aid smooth implementation. The SKP has already begun operations as of March 1, 2026, concentrating on issuing standards for authorization and conduct regulation and ensuring the licensing and registration processes run effectively.
Liew added that credit reporting agencies (CRAs) play a vital role in bolstering Malaysia's credit system by providing reliable credit data and insights that help lenders make informed decisions while enabling consumers to better understand and manage their financial health. He encouraged CRAs to continue innovating, adopt new technologies, and enhance data quality, cybersecurity, and interoperability across the ecosystem.