Latest news with #ConsumerCreditCommission
The Sun
2 days ago
- Business
- The Sun
Buy now, pay later: A convenient trap for young Malaysians
USING the 'buy now, pay later' (BNPL) scheme for the first time felt harmless. Just three easy payments for a pair of shoes that were not really necessary. It seemed like a smart move at the time – no interest, no hassle and no guilt. But that mindset is exactly what gets so many young people into trouble. From 2020 to 2025, more than 5,189 Malaysians under the age of 34 were declared bankrupt. Most of them were between 25 and 34, an age group that should be building their financial future. This is not just a statistic; it reflects a growing reality for many young adults trying to manage life's expenses with limited income and increasing pressure to spend. With BNPL so widely available and heavily promoted, it is no surprise that more people are relying on it. The recent Consumer Credit Bill passed in Parliament shows how urgent the problem has become. The new law introduces the Consumer Credit Commission to oversee BNPL and other non-bank credit providers. It is a step in the right direction but the fact that it is even needed speaks volumes. BNPL is appealing because it feels light at first. No upfront payments, offers interest-free instalments and fast approval. But the catch comes later, quietly. Miss one instalment and there is a penalty. Miss a few and the debt will grow without warning. Penalties between RM10 and RM50 may not sound like much until they keep stacking up. It becomes easy to lose track of how many items are being paid off. What began with one small item turns into four or five ongoing commitments. BNPL encourages impulse decisions. The thought process is no longer 'can I afford this' but 'can I split this'. Bank Negara reported that most BNPL users earn below RM3,000 a month. For many, even one missed payment affects rent, food or transport. BNPL has helped some low-income families afford essentials, like baby formula and groceries, especially during difficult times. That is understandable but it should not become the default way to survive. In the first half of 2025 alone, Malaysians spent RM9.3 billion through BNPL, of which RM121 million is overdue, and the numbers are not slowing down. What is worrying is how normalised it has become. They are not only used for emergencies or needs but also for clothes, gadgets and online shopping sprees. These habits can lead to debt that may seem manageable but can become overwhelming over time. Therefore, regulation helps. However, awareness matters more. Many still do not grasp the risks they are taking. Educational institutions should teach students on money management. Financial literacy is a skill that needs to be taught and cultivated early, not learned after it has become a problem. BNPL is not an enemy but without control, it can turn into a cycle that will be hard to break. The best solution is to have self-discipline before it is too late. Darren Ong Wei Shen is a student at City University Malaysia. Comments: letters@
New Straits Times
3 days ago
- Business
- New Straits Times
Buy Now, Pay Later should not be the default way to survive
LETTERS: The first time using Buy Now, Pay Later (BNPL) felt harmless. Three easy payments for a pair of shoes. No interest, no hassle, no guilt. But that mindset is exactly what gets so many young people into trouble. From 2020 to 2025, more than 5,189 Malaysians under the age of 34 were declared bankrupt. Most of them were between 25 and 34, an age group that should be building their financial future. This is not just a statistic. It reflects a growing reality for many young adults trying to manage life's expenses with limited income and increasing pressure to spend. With BNPL so widely available and heavily promoted, it's no surprise that more people are relying on it. The recent Consumer Credit Bill passed in Parliament shows how urgent the problem has become. The new law introduces the Consumer Credit Commission to oversee BNPL and other non-bank credit providers. It's a step in the right direction, but the fact that it's needed at all speaks volumes. BNPL is appealing because it feels light — no upfront payments, interest-free instalments, and fast approval. But the catch comes later, quietly. Miss one instalment and there's a penalty. Miss a few, and the debt grows without warning. Penalties between RM10 and RM50 might not sound like much, until they keep stacking up. What began with one small item turns into four or five ongoing commitments. BNPL encourages impulse decisions. The thought process is no longer "can I afford this," but "can I split this". Bank Negara Malaysia reports that most users earn below RM3,000 a month. For many, even one missed payment affects rent, food or transport. BNPL has helped some low-income families afford essentials like baby formula and groceries, especially during difficult times. That's understandable. But it shouldn't become the default way to survive. In the first half of 2025 alone, Malaysians spent RM9.3 billion through BNPL. Some RM121 million of that is overdue. The numbers aren't slowing down. What's worrying is how normalised it has become. Not just for emergencies or needs, but for clothes, gadgets and online shopping sprees. These habits can lead to ongoing debt that feels manageable at first but becomes overwhelming over time. Regulation helps. But awareness matters more. Many still don't fully understand the risks they're taking. Educational institutions should do more to teach students about managing their money. Financial literacy is a skill that needs to be taught and cultivated early, not learned after it has become a problem. BNPL is not the enemy. But without control, it turns into a cycle that's hard to break.
New Straits Times
24-07-2025
- Business
- New Straits Times
New law will regulate BNPL, instant loans, says ministry
KUALA LUMPUR: The new consumer credit law will protect Malaysians from financial risks stemming from uncontrolled credit use and unethical lending practices, said the Finance Ministry. The ministry said the legislation seeks to address challenges posed by the growing digital finance landscape, including hidden risks linked to instant loans and "buy now, pay later" (BNPL) schemes. On Monday, the Dewan Rakyat passed the Credit Consumer Bill 2025 after it was tabled for its second and third readings by Deputy Finance Minister Lim Hui Ying. The bill was debated by 23 lawmakers. "The bill will serve as the primary law regulating all credit-related businesses and services," said the ministry. "It will ensure fair conduct by credit providers, mandate transparency in charges and introduce professional guidelines for debt collection and dispute resolution." It added that consumers facing financial hardship would also have access to assistance and advice through authorised and registered channels. "For the first time, a Consumer Credit Commission will be established to regulate service providers previously operating without direct oversight, including leasing companies, factoring firms, debt collection agencies, and non-bank digital financing providers. "The commission will also streamline regulatory functions currently spread across multiple ministries and agencies under one roof, ensuring more uniform and efficient supervision of the credit industry." The ministry said the bill reflected the government's long-term commitment to creating a safer and more inclusive consumer credit ecosystem. Lim had said on Monday that the bill, once gazetted, would introduce integrated regulations in phases. These phases would take into account the industry's level of preparedness and the Consumer Credit Commission's growing capacity, which will be gradually strengthened. She added that the commission would also assume regulatory responsibilities in stages, starting with the currently unregulated credit providers, with full centralisation of oversight expected by 2031.
New Straits Times
23-07-2025
- Business
- New Straits Times
Consumer Credit Bill to tackle hidden risks in BNPL, instant loans
KUALA LUMPUR: The introduction of the Consumer Credit Bill 2025 will protect Malaysians from financial risks stemming from uncontrolled credit use and unethical lending practices. The Finance Ministry said the comprehensive legislation aims to address challenges posed by the growing digital finance landscape, including hidden risks linked to instant loans and Buy Now Pay Later (BNPL) schemes. "The bill will serve as the primary law regulating all credit-related businesses and services. It will ensure fair conduct by credit providers, mandate transparency in charges, and introduce professional guidelines for debt collection and dispute resolution," it said in a statement. The ministry also said consumers facing financial hardship will also have access to assistance and advice through authorised and registered channels. "For the first time, a Consumer Credit Commission will be established to regulate service providers previously operating without direct oversight, including leasing companies, factoring firms, debt collection agencies and non-bank digital financing providers. "The commission will also streamline regulatory functions currently spread across multiple ministries and agencies under one roof, ensuring more uniform and efficient supervision of the credit industry," it added. The ministry said the bill reflects the government's long-term commitment to creating a safer and more inclusive consumer credit ecosystem, with phased implementation expected to significantly impact the country's financial landscape. Yesterday, the Dewan Rakyat passed the bill after it was tabled for its second and third readings by Deputy Finance Minister Lim Hui Ying today, and was debated by 23 lawmakers. Once gazetted, Lim said, the bill will introduce integrated regulations in phases, taking into consideration the industry's level of preparedness and the growing capacity of the Consumer Credit Commission, which will be gradually strengthened throughout each phase. She added that the commission will also assume regulatory responsibilities in stages, starting with currently unregulated credit providers, with full centralisation of oversight expected by 2031.
The Sun
21-07-2025
- Business
- The Sun
New BNPL regulations in Malaysia to prevent debt traps
KUALA LUMPUR: The Consumer Credit Commission (CCC) is set to enforce a new regulatory framework for Buy Now, Pay Later (BNPL) schemes to safeguard consumers from excessive debt and potential bankruptcy. Deputy Finance Minister Lim Hui Ying announced the measures during the second reading of the Consumer Credit Bill 2025 in the Dewan Rakyat. Under the upcoming rules, BNPL providers must conduct debt affordability assessments before approving loans. 'This assessment ensures borrowers can repay without severe financial strain,' Lim said. The CCC will monitor compliance, ensuring companies adhere to these checks. Currently, most BNPL loans remain below bankruptcy thresholds. Transparency is another key focus. Providers must clearly disclose fees and credit terms before offering services. 'Consumers deserve full awareness of their financial commitments,' Lim added. The government also plans to enhance financial literacy to help users make informed decisions. Malaysia's BNPL market is growing fast, with 16 active providers. SPay Later, Atome, and GrabPay Later dominate, holding over 95 per cent of the market. The new regulations aim to balance industry growth with consumer protection. – Bernama
