The legislation comes amid rising public concern over the sharp rise of BNPL users, which saw transaction value growing over 30% to RM9.3 billion in the first half of 2025, up from RM7.1 billion in the second half of 2024.
KUALA LUMPUR (July 21): The Dewan Rakyat on Monday approved a new legislation to regulate non-bank credit and credit service providers amid growing concerns over the proliferation of buy-now-pay-later (BNPL) schemes.
The bill, named the Consumer Credit Bill 2025, was approved through a majority voice vote. It paves the way for the establishment of a new statutory body — the Consumer Credit Commission (CCC) — which will be responsible for overseeing industry conduct, enforcing standards, and advising the government on consumer credit policy.
Under the bill, six types of businesses will be subject to oversight by the CCC, three of which will require licences from the commission to operate, namely the ones that provide BNPL schemes, leasing and factoring (including Shariah-compliant services). In finance, factoring refers to a financial transaction where a business sells its accounts receivable or unpaid invoices to a third party, known as a "factor", at a discount.
The three other types of services that will come under the commission's oversight are: debt collection, acquisition of non-performing loans or financing, and debt counselling or management services. These will need to be registered with the CCC to operate.
There are a total of 253 businesses across these six categories that will come under the CCC's regulation.
Additionally, the Ministry of Housing and Local Government will assume the responsibility for licensing Shariah-compliant pawnbroking (Ar-Rahnu) and Shariah-compliant credit facilities, said Deputy Finance Minister Lim Hui Ying when tabling the bill for its second reading.
Three-stage implementation
In a statement later, Lim said the new law will be implemented in three phases after it is gazetted later this year. The establishment of the CCC is just the first phase to regulate credit businesses and credit service businesses that are not currently regulated by any authority.
Phase two is the transfer of regulatory functions related to consumer credit activities from the Ministry of Domestic Trade and Cost of Living (KPDN) and the Ministry of Housing and Local Government (KPKT) to the CCC from 2028.
The last phase will involve the centralisation of conduct regulation for all financial market activities in Malaysia, which is still at the early stages of study by the government.
Rising concern
The legislation comes amid rising public concern, as flagged by Lim, over the sharp rise of BNPL users, which saw transaction value growing over 30% to RM9.3 billion in the first half of 2025, up from RM7.1 billion in the second half of 2024.
Of this, overdue payments accounted for 3.2% or RM121 million, Lim said. Malaysia currently has 16 BNPL providers, including Atome, SPayLater, and GrabPayLater.
As of June 2025, there were 6.5 million active BNPL accounts, collectively recording 102.6 million transactions, up from 5.1 million accounts at the end of 2024.
“This rapid growth raises concerns about risks to vulnerable consumers, particularly those with unstable income or limited financial literacy,” Lim told Dewan Rakyat.
Lim also raised alarm over reports of unethical practices among debt collectors and illegal moneylenders, commonly referred to as “ah long”. “Various complaints have also been received regarding the conduct or methods of debt collectors who use violence and excessive harassment towards credit users," she said.
"Complaints have also been received about individuals who present themselves as intermediaries or helpers in managing debts, but in reality, they take advantage to profit through exploitative or fraudulent means."
MPs' recommendations
Among proposed enhancements from MPs during the bill's debate was one from government backbencher Sim Tze Tzin (PH-Bayan Baru), who called for greater "financial transparency", saying Malaysians should be granted public access to their credit scores.
Currently, Malaysians need to purchase credit reports through recognised credit reporting agencies such as CTOS and Central Credit Reference Information System (CCRIS), or access them from financial institutions and online platforms.
Meanwhile, Datuk Wira Mas Ermieyati Samsudin (PN-Masjid Tanah) urged for a cap on penalty charges under BNPL schemes, so that they do not exceed the outstanding debt owed.
Responding during the winding-up of the debate, Lim said while there is no cap on interest rates now for BNPL products, the government intends to introduce such limits at a later stage, adding the current or first phase of implementation now is mainly for data collection purposes.
Opposition member Ahmad Tarmizi Sulaiman (PN-Sik) also urged the CCC to regularly publish a list of registered moneylenders and their applicable interest rates, as well as to disclose blacklisted entities, to help borrowers make more informed decisions.
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