CCOB EXPECTS CONSUMER CREDIT BILL TO TAKE EFFECT IN 1Q 2026

By Karina Imran

KUALA LUMPUR, Nov 21 (Bernama) -- The Consumer Credit Bill 2025, which provides broader consumer protection by regulating excessive fees and through the practice of ethical debt collection, is expected to take effect in the first quarter of 2026, the Consumer Credit Oversight Board (CCOB) said.

CCOB Task Force chief Abu Hassan Alshari Yahaya said the board is currently awaiting the bill’s gazettement and subsequent steps to establish the Consumer Credit Commission.

He said the act’s implementation will enable the government to license non-bank credit providers, including Buy Now Pay Later (BNPL) companies, which are currently operating without supervision.

“The main objective of this act is to regulate the consumer credit sector and enhance consumer protection, especially for those dealing with currently unregulated lenders. We want to ensure they operate fairly, responsibly and transparently,” he told Bernama.

According to the Ministry of Finance, the Consumer Credit Bill 2025 was passed in the Senate on Sept 4 and is expected to be gazetted by the end of this year.

Abu Hassan said once the law is gazetted, CCOB will issue mandatory guidelines and standards that all licensed lenders and credit service providers must comply with.

“We will provide clarity on ‘fit and proper’ requirements and the operating standards that must be met when the licensing process begins,” he said.

Under the act, lending companies will undergo due diligence and assessment to determine their ability to operate fairly when offering licensed BNPL services.

Commenting on the trend in the BNPL sector, Abu Hassan explained that use of BNPL facilities continues to rise this year, with the number of active users reaching nearly 6.5 million in the first half of 2025.

“We expect this trend to continue growing,” he added, noting that CCOB will closely monitor debt risks among users.

Abu Hassan said 70 per cent of the current BNPL users earn less than RM5,000 a month, while 40 per cent are youth.

“Both groups may be more vulnerable to financial risk. Even though the loan amounts are small, uncontrolled debt accumulation can create vulnerabilities. That is why regulation is so important,” he said.

Currently, 16 BNPL companies operate in Malaysia, with three major players controlling roughly 90 per cent of the market.

Abu Hassan also advised youths to use BNPL services prudently.

He stressed that using financial products must be accompanied by skills and financial knowledge.

“BNPL has its benefits, but users should be aware of the fees and terms and conditions and make a careful assessment before borrowing,” he added.

-- BERNAMA