KUALA LUMPUR, March 24 (Bernama) -- Buy now, Pay Later (BNPL) activity has grown rapidly, although the total outstanding BNPL debt remained a small proportion of overall household debt at RM2.8 billion or 0.2 per cent as of December 2024.
Bank Negara Malaysia (BNM), in its Financial Stability Review for the second half of 2024 (2H 2024), noted that the total amount of purchases made via BNPL - both in terms of transaction volume and value - increased to 83.8 million transactions and RM7.1 billion, respectively, in 2H 2024.
It said that the number of active BNPL users reached 5.1 million as of end-December 2024 compared to June 2024’s 4.3 million.
An active BNPL user is defined as an account holder with at least one BNPL transaction in the past 12 months. A credit consumer may own multiple BNPL accounts with different providers.
Nonetheless, the central bank said risks associated with BNPL remain contained.
“The level of BNPL overdue amount remained low at 2.9 per cent of total BNPL outstanding balances during the period (June 2024: 2.6 per cent),” it said.
BNM reported that BNPL providers have also been observed to offer facilities for higher-value transactions alongside longer instalment periods of up to 24 months compared to the typical one to six months previously observed.
In addition, BNPL providers continue to observe practices that serve to mitigate concerns over broader risks from distressed borrowers.
“These include observing lower credit limits for new users, immediately suspending facilities upon a missed repayment, and proactively managing credit limits of users with anticipated repayment difficulties,” it said.
Furthermore, the enactment of the Consumer Credit Act (CCA) in 2025 would enable the establishment of the Consumer Credit Commission to regulate and supervise non-bank credit providers and credit service providers which are currently not regulated, including businesses offering BNPL schemes.
“This will strengthen existing regulatory and supervisory arrangements for the protection of credit consumers,” BNM added.
-- BERNAMA
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