KUALA LUMPUR (Jan 27): All companies offering buy now, pay later (BNPL) schemes will be required to conduct creditworthiness and affordability assessments before approving any financing once the Consumer Credit Act 2025 comes into force later this year, Deputy Finance Minister Liew Chin Tong said.

The legislation, Liew said, will also require BNPL providers to practise responsible credit provision to protect consumers, including ensuring that transaction terms, charges and fees are transparent, reasonable and do not impose an undue burden on users.

“The Consumer Credit Commission (CCC) will also be established under the Act to regulate non-bank credit and credit service providers. It is our hope that the commission will be operational by mid-year,” Liew said during a Special Chamber session in Parliament on Tuesday (Jan 27).

The Consumer Credit Act 2025 was approved by both the lower and upper houses of Parliament last year and received royal assent earlier this year. The Act is aimed at addressing growing concerns over the proliferation of BNPL schemes.

Among other responsibilities, the CCC will regulate industry compliance and address breaches that undermine consumer protection. It has the authority to investigate, enforce rules, and impose penalties on non-compliant credit providers in the country.

Liew noted that BNPL activity in Malaysia remains at a manageable level. Outstanding BNPL loans stood at RM4.9 billion as of end-December 2025 and are expected to remain around 0.3% of total household debt, with overdue loans at RM160.2 million or 3.3%.

BNPL transactions surged 66% in 2025 to 243 million, while transaction value rose 78% to RM21.3 billion. Young consumers under 30 accounted for roughly 40% of all BNPL activity, primarily for groceries, food, transportation, and services, with an average transaction value of RM91, Liew said.

On household debt, Liew said Malaysia’s total reached RM1.69 trillion by the end of September 2025, equivalent to 84.9% of GDP. Youth under 30 accounted for 7.8% of total household debt, or RM132.4 billion, with unsecured loans such as personal financing and credit card debt standing at RM10.6 billion. The median age of young borrowers with unsecured debt was 27, he added.

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