KUALA LUMPUR: Bank Negara Malaysia (BNM) is working to enact the Consumer Credit Act in 2022, with the aim of strengthening regulatory arrangements for all consumer credit activities, including providers of "Buy Now Pay Later" schemes.

       Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus said the central bank will be collaborating with the Ministry of Finance (MoF) and the Securities Commission (SC) to enact the Act.

       She noted that BNM is engaging with the relevant authorities to monitor developments and educate the public on BNPL schemes, however, the share of credit to households and the schemes remains small.

       "For the first nine months of this year, the total value of the transaction is estimated to be around 0.05 per cent of total household borrowing.

       "These schemes have been on the rise, not just in Malaysia, but also in other countries and there are legitimate concerns that such schemes may encourage consumers to spend beyond their means, with expensive debt that they may not be able to repay, and most BNPL schemes in Malaysia are offered by non-banks," she said.

       Nor Shamsiah was quoted as saying during a joint press conference by BNM and the Department of Statistics Malaysia (DOSM) on Malaysia's third-quarter (Q3) 2021 GDP performance here on Friday.

       She also advised Malaysians to read the terms and conditions carefully, especially the fees and charges, to pay the installment in full on time to avoid penalties, and to keep track of their individual BNPL commitments to ensure proper debt management.

       The creation of a Consumer Credit Act, which was announced in Budget 2021, aims to provide a regulatory framework for the issuance of consumer credit while also strengthening oversight of non-bank credit providers.

       The Federation of Malaysian Consumers Associations has long advocated for this Act to strengthen consumer protection in the financial sector. - Bernama