CCOB AIMS TO HAVE CONSUMER CREDIT BILL 2025 GAZETTED BY YEAR-END

By Zairina Zainudin

KUALA LUMPUR, March 21 (Bernama) -- The Consumer Credit Oversight Board (CCOB) task force aims to have the Consumer Credit Bill 2025 gazetted by the end of this year, said Bank Negara Malaysia Assistant Governor Abu Hassan Alshari Yahaya.

The bill was tabled for its first reading in the Dewan Rakyat by Deputy Finance Minister Lim Hui Ying on March 4 as part of government efforts to enhance consumer protection in the credit sector.

Abu Hassan Alshari, who is the head of CCOB Task Force, said the second reading of the bill is scheduled for the next June-August parliamentary session.

"We hope to finalise the bill in the fourth quarter and, hopefully, gazette it by the end of the year to set the act’s effective date,” he said during a media briefing on the bill here today.

Abu Hassan Alshari said the absence of a regulatory framework for unregulated players in the consumer credit industry poses a risk of unfair practices, especially with the surge in the “Buy Now, Pay Later” (BNPL) payment method which might harm vulnerable consumers and increase the risk of uncontrolled debt among households.

The non-bank factoring and leasing companies that provide credit to individuals, as well as micro and small enterprises, are also unregulated at this time, he 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. This will enhance consumer protection standards, making it more consistent and fair,” he said.

Abu Hassan Alshari said the public made numerous complaints involving impaired loan buyers and debt collection agencies, among others. 

Moreover, there were calls for these credit service businesses to be regulated, he said.

BNPL transactions showed significant growth since 2023 with 83.8 million transactions valued at RM7.1 billion in the second half of 2024.

A total of 149 million BNPL transactions worth RM12 billion were made throughout 2024, double the previous year. The average value per BNPL transaction is between RM70 and RM90.

As of December 2024, there were 12 BNPL providers, including four Shariah-compliant ones.

Three major BNPL providers Shopee (SPayLater), Grab (PayLater by Grab) and Atome have a market share of more than 95 per cent in terms of active BNPL account holders, volume and value of BNPL transactions.

Abu Hassan Alshari said growth is expected to continue with rising user familiarity with BNPL usage and the introduction of new BNPL schemes by e-commerce platform providers such as TikTok PayLater and LazPaylater.

On the outstanding balance, he added that BNPL’s credit exposure was RM2.8 billion at the end of the fourth quarter of 2024, rising on par with the overall growth in BNPL transactions.

-- BERNAMA