Malaysia’s Consumer Credit Bill 2025: Key Regulatory Shifts and Industry Implications

Establishment of the Commission

The Commission’s functions include advising the Government on national policy, promoting proper conduct among providers, and supporting the growth of the industry. Under Clause 8, the Commission is empowered to regulate and supervise all matters related to consumer credit, including overseeing providers, imposing penalties, and conducting investigations.

Scope of Regulated Activities

The Bill regulates two main categories: Credit Business (moneylending, pawnbroking, hire purchase, BNPL schemes, leasing, and factoring) and Credit Service Business (debt collection, debt counselling, and the purchase of impaired credit facilities).

Notably, Buy-Now-Pay-Later (BNPL) schemes are explicitly defined and distinguished from traditional moneylending to ensure specific regulatory oversight for fintech-driven models.

Implementation by Phases

• Phase 1: Oversight of currently unregulated providers (e.g., BNPL).
• Phase 2 (2028): Transfer of moneylending and pawnbroking from KPKT, and hire purchase from KPDN.
• Phase 3 (2031+): Centralisation of conduct regulation across the industry.

Licensing and Registration

Any person carrying on a credit business must be licensed (Clause 40), requiring them to meet minimum financial thresholds and "fit and proper" criteria for directors and key personnel. Similarly, credit service businesses must register with the Commission, adhering to ongoing transparency and business structure obligations.

Islamic Credit Business

Part VI underscores that all Islamic credit business must comply with Shariah. The Shariah Advisory Council (SAC) plays a central role in determining compliance, ensuring that Shariah principles are embedded in both regulatory oversight and legal adjudication.

Enforcement and Penalties

The Bill establishes a comprehensive enforcement regime. Authorities may issue directives, impose monetary penalties, or mandate restitution to consumers. Falsifying or destroying documents related to operations can result in fines up to RM5 million, five years' imprisonment, or both.