Consumer Credit Bill to tackle hidden risks in BNPL, instant loans
By Fuad Nizam
KUALA LUMPUR: The introduction of the Consumer Credit Bill 2025 will protect Malaysians from financial risks stemming from uncontrolled credit use and unethical lending practices.
The Finance Ministry said the comprehensive legislation aims to address challenges posed by the growing digital finance landscape, including hidden risks linked to instant loans and Buy Now Pay Later (BNPL) schemes.
"The bill will serve as the primary law regulating all credit-related businesses and services.
It will ensure fair conduct by credit providers, mandate transparency in charges, and introduce professional guidelines for debt collection and dispute resolution," it said in a statement.
The ministry also said consumers facing financial hardship will also have access to assistance and advice through authorised and registered channels.
"For the first time, a Consumer Credit Commission will be established to regulate service providers previously operating without direct oversight, including leasing companies, factoring firms, debt collection agencies and non-bank digital financing providers.
"The commission will also streamline regulatory functions currently spread across multiple ministries and agencies under one roof, ensuring more uniform and efficient supervision of the credit industry," it added.
The ministry said the bill reflects the government's long-term commitment to creating a safer and more inclusive consumer credit ecosystem, with phased implementation expected to significantly impact the country's financial landscape.
Yesterday, the Dewan Rakyat passed the bill after it was tabled for its second and third readings by Deputy Finance Minister Lim Hui Ying today, and was debated by 23 lawmakers.
Once gazetted, Lim said, the bill will introduce integrated regulations in phases, taking into consideration the industry's level of preparedness and the growing capacity of the Consumer Credit Commission, which will be gradually strengthened throughout each phase.
She added that the commission will also assume regulatory responsibilities in stages, starting with currently unregulated credit providers, with full centralisation of oversight expected by 2031.
Source : consumer-credit-bill-tackle-hidden-risks-bnpl-instant-loans
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