Consumer Credit Act 2025: What It Means for Borrowers in Malaysia
The Consumer Credit Act 2025 creates the Consumer Credit Commission and brings previously unregulated non-bank credit providers — including BNPL operators — into a licensing and conduct regime. It does not ban BNPL; it raises the floor on affordability checks, disclosure, complaints handling, and debt collection.
What the Consumer Credit Act 2025 actually is
The Consumer Credit Act 2025 (Act 873) creates a national framework for consumer credit in Malaysia. Before it, several non-bank credit businesses — buy now pay later (BNPL) operators in particular — sat outside any dedicated licensing regime. The Act brings them, along with leasing, factoring, and parts of the debt-collection industry, into a statutory framework.
It also sets up the Consumer Credit Commission (CCC), known in Malay as Suruhanjaya Kredit Pengguna (SKP). The Commission can license or register firms under its scope, publish a public list of approved providers, specify conduct standards, and enforce the Act. This does not replace Bank Negara Malaysia for banks or every existing sector regulator; the Act works through a phased, multi-agency rollout.
The dates that actually matter
Three dates frame the rollout. The Act was gazetted on 31 December 2025 and came into force on 1 March 2026, the same day the Consumer Credit Commission was established. The licensing and registration requirements then took effect on 1 June 2026.
Existing providers were given six months from that licensing start date to apply for the licence or registration they now need. So through the second half of 2026 you may see familiar BNPL apps operating while applications are processed — being in the transition window is not the same thing as being outside regulation.
Who the Act protects
The Act is not only about app-based shopping. It applies to credit business or credit service business involving a "credit consumer". For an individual, that means someone who obtains, has obtained, or intends to obtain credit wholly or mainly for personal, domestic, or household purposes. The Act also covers micro and small enterprises in specified consumer-credit contexts.
That scope is why the borrower lens matters. A small instalment plan, a non-bank leasing arrangement, or a debt-management service can now sit within the same broad consumer-protection framework instead of being treated as a purely private contract with little regulatory visibility.
Who must be licensed, and who must register
The Act splits regulated firms into two tracks. Credit providers — the businesses that actually extend credit — must obtain a licence. Credit service providers — businesses that act around the credit — must register. The distinction matters because a licence is the higher bar.
- Must be licensed (credit providers): BNPL scheme operators, leasing companies, and factoring companies.
- Must register (credit service providers): debt collection agencies, impaired-loan or financing acquisition firms, and debt counselling and management agencies.
- To get and keep either status, applicants must meet a prescribed minimum financial threshold at all times and show their controllers, directors, and senior management are "fit and proper".
- The CCC can refuse, suspend, or revoke a licence, and require divestment when key people fail the fit-and-proper test.
What changes for you as a borrower
The headline shift is responsible lending. The Act lets regulations, standards, and guidelines deal with affordability assessment, including circumstances where credit should not be provided. The CCOB materials describe this as an expectation that non-bank credit providers assess whether a borrower can repay without undue financial hardship.
Alongside that come fair-conduct duties: information must be accurate, clear, timely, and not misleading; credit agreement terms must be fair; fees and charges can be addressed through conduct standards; debt collection must follow fair-practice requirements; and complaints handling is part of the statutory conduct framework.
Worked example: how an affordability check changes a BNPL approval
Say you take home RM3,000 a month and already run four BNPL plans: RM120, RM90, RM150, and RM80 a month. That is RM440, about 15% of your take-home pay, committed to instalments before rent, food, or transport.
You add a fifth plan of RM200 at a checkout. Under the old soft-check model it might be approved on the spot. Under responsible-lending duties, a licensed provider should weigh your income and the RM440 you are already paying. Pushing total instalments to RM640 — about 21% of take-home — is the kind of layering the Act is designed to slow down. The plan may be declined, capped, or require proof of income. That can feel inconvenient at the till, but it is the mechanism meant to stop small "RM200 here, RM150 there" decisions from quietly compounding into unmanageable monthly debt.
What the Act does not do
It does not ban BNPL or make instalment shopping illegal. It does not erase your existing plans or automatically change their terms. And it does not turn the regulator into your lender — the CCC supervises conduct and licensing; individual approval decisions still sit with each provider under its own policy.
It is also not a substitute for your own affordability check. The Act raises the floor on provider behaviour; it does not calculate, on your behalf, how much debt fits your income. That part is still yours — and a debt-service-ratio view is the cleanest way to see it.
What to do now
Treat the new regime as a prompt to tidy your own position before you take on more credit.
- List every active instalment and BNPL plan and total the monthly commitment — most people underestimate it.
- Check that total against your take-home pay; if instalments alone are a large slice, pause new plans.
- Before a big loan application, clear small BNPL plans a cycle or two early so the snapshot a bank sees is cleaner.
- Use the DSR calculator to see how your commitments stack up against the comfort range lenders work within.
Common questions
Is BNPL banned under the Consumer Credit Act 2025?+
No. BNPL remains legal. The Act requires BNPL operators to be licensed and to lend responsibly, price fees transparently, and collect debts ethically — it regulates the practice rather than banning it.
When did the Consumer Credit Act 2025 take effect?+
It was gazetted on 31 December 2025 and came into force on 1 March 2026. Part V, covering licensing and registration, came into operation on 1 June 2026, with existing affected providers given six months from that date to apply.
Who is the Consumer Credit Commission?+
The CCC is the new regulator established under the Act on 1 March 2026. It licenses credit providers such as BNPL firms, registers credit service providers such as debt collectors, publishes the list of who is approved, and enforces conduct rules.
Will my existing BNPL plans change?+
The Act does not automatically alter plans you have already entered. Going forward, a licensed provider is expected to assess affordability before approving new credit, so you may notice stricter checks on new plans.
Does this affect my loan application or DSR?+
Indirectly. BNPL and instalment commitments are part of the monthly obligations a lender weighs. Fewer overlapping plans means a cleaner affordability picture. Calculate your DSR with all instalments included before applying.