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MONDAY | JULY 28, 2025

Atome lauds introduction of Consumer Credit Act

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA LUMPUR: The incoming Consumer Credit Act will foster trust, transparency and more res ponsible credit usage, said Atome Malaysia’s head of BNPL (buy now, pay later), Danny Lim ( pic ). The legislation will also help enhance confidence in BNPL ser vices and the industry, he added. “In terms of what we focus on, in the short term, we want to make sure that we are supporting the regulators as they finalise the Bill. That’s our commitment, working with the regulators, seeking their advice, and also doing what’s required,” he told SunBiz . Lim said Atome fully supports

rakyat ,” said Hui Ying. The deputy finance minister tabled the Bill for its first reading in the Dewan Rakyat on March 4. It was passed during the second reading on July 21 through a majority voice vote. The Consumer Credit Bill 2025 paves the way for regulating non bank credit and credit service providers amid rising concerns over BNPL scheme proliferation. Under the Bill, six types of businesses will come under the commission’s oversight. Three will require licences from the CCC to operate – BNPL providers, leasing companies and factoring services providers (including syariah compliant offerings). In financial terms, factoring involves a business selling its unpaid invoices to a third party, or “factor”, at a discount to raise working capital. The other three – debt collection, acquisition of non-performing loans or financing, and debt counselling or management services – must register with the CCC. In total, 253 businesses across these six categories will be regu lated. investors should watch core con sumption data, such as household spending trends within GDP, to gauge any lasting effects. “Most of the time, it depends on fundamentals rather than short-term cash injections,” she said. With the cash handout set to conclude by year end, attention now turns to whether Malaysia will adopt similar measures in Budget 2026. Williams believes the government should study the current initiative’s outcomes to guide future policy design. “The most important thing is to learn lessons about the impact so that Malaysia can move to a regular monthly payment. Hopefully this can be announced in Budget 2026,” he said. For now, economists agree that while the RM100 handout provides short-term relief and a modest consumption boost, it does little to address structural income gaps or long term growth prospects for consumer stocks. As markets digest the announce ment, the focus will likely shift back to corporate earnings, inflation trends and global economic conditions heading into 2026.

To address this and protect the interests of credit consumers, the government will establish a statu tory body known as the Consumer Credit Commission (CCC) under the Consumer Credit Act. The commission, which will come under the Ministry of Finance, will regulate currently unregulated sectors through a licensing and registration framework. Hui Ying said the Bill is part of the government’s broader effort to introduce comprehensive consumer credit legislation and restructure Malaysia’s credit landscape. It is designed to address two major chal lenges – the presence of unregulated industry players and the fragmented oversight of the credit sector by multiple authorities. “The Bill’s core aim is to protect consumer interests by ensuring proper conduct and responsible lending by all credit-related busi nesses, while promoting a fair, efficient, and transparent credit ecosystem,” she said. The Bill outlines the CCC’s responsibilities, including advising the government on national con sumer credit policy, promoting fair and responsible market practices and granting licences based on a “fit and proper” evaluation. “With this Bill, the government affirms its commitment to creating a safer credit ecosystem for the local communities. It won’t harm the fiscal deficit because it’s funded by subsidy rationalisation savings,” he said. Williams also suggested the initiative could act as a pilot for a more ambitious social welfare reform. “If this evolved into a monthly universal basic income, it could be a game changer for social policy. Universality reduces costs and complexity, and future versions could be made more progressive,” he added. Despite the initial rally in con sumer-linked counters on Bursa Malaysia, analysts caution that senti ment-driven gains may not be sustainable without underlying earnings growth. Ferlito pointed to external head winds, including global political tensions and slower economic momentum, as key drivers of investor caution. “What emerges here is the concern about the economy slowing down due to international tensions, both political and economic,” he said, warning against overestimating the handout’s role in market perfor mance. Ida echoed this, noting that

o New law, when gazetted, will foster trust, transparency, more responsible credit usage and enhance confidence in ‘buy now pay later’ industry, says BNPL services head

the introduction of the Act as many still don’t have access to bank credit. “There are still under served segments without access to regulated finan cial services, and we’re bridging that gap by supporting their short term financing needs.” Lim stressed that Atome aims to improve financial literacy and ensure users understand how to use BNPL as a budgeting tool and not for overspending.

be needed. “We already have something in place that should be sufficient from a regulatory perspective. Operation ally, regulation won’t impact us too much.” According to news reports, Deputy Finance Minister Lim Hui Ying said BNPL transaction volumes rose from RM83.8 million in the second half of 2024 to RM102.6 million in the first half of this year. During the second reading of the Consumer Credit Bill 2025 in the Dewan Rakyat on July 21, Hui Ying said the surge in BNPL activity poses risks to consumers, especially low income groups and those with poor financial literacy, who are vul nerable to unmanageable debt. The total value of BNPL trans actions increased 31%, from RM7.1 billion in second-half 2024 (H2’24) to RM9.3 billion in H1’25. The number of active BNPL accounts rose from 5.1 million at the end of last year to 6.5 million as of end June. essentials like food and household goods, but most stock market move ments depend on business funda mentals.” Ida stressed that the handout’s impact would likely fade after its expiry in December, underscoring the short term nature of the initiative. “It benefits sellers, wholesalers and producers, from vegetables to chicken, but the up and down movements in the stock market are quite normal and not directly tied to such measures,” she said. In contrast, Prof Geoffrey Williams, economist and founder of Williams Business Consultancy, sees value in the handout for low income house holds, noting its multiplier effect on domestic consumption. “RM100 does not sound like much, but it is a 6% boost for someone on minimum wage of RM1,700. For a family of four adults in the B40 group, that’s about a 6–7% rise in monthly income,” he explained. Williams estimated the RM2 billion programme could generate RM6 billion in consumption through multiplier effects, providing a small but notable stimulus to economic growth in the second half of the year. “This will particularly help SMEs in

“And, of this, I think it’s important to ensure that we give public confi dence, so these regu lators’ view coming up to us is a good positive move, so that users are more confident in using this. That’s how we see it.” Atome compliance lead Inderjit Singh said its internal frameworks are modelled on regulatory standards from other countries where BNPL is

He pointed to a survey by the Consumer Credit Oversight Board, which found that 73% of BNPL users earn less than RM5,000 per month and of which 69% say that this is their only source of financing as they don’t have access to or are not served by any bank. However, Lim acknowledged that public perception of BNPL is negative, largely due to regulatory gaps and lack of awareness. PETALING JAYA: Prime Minister Datuk Seri Anwar Ibrahim’s an nouncement of a one off RM100 cash handout has lifted sentiment in consumer-related stocks, but eco nomists caution that the impact on actual spending and equity perfor mance may be fleeting, with deeper structural challenges still weighing on the economy. The initiative, worth RM2 billion, is designed to provide relief to house holds and channel spending into local goods and services. However, views among analysts and eco nomists are mixed – some highlight modest gains for low income groups and small businesses, while others warn the measure may do little to shift broader market fundamentals. Center for Market Education chief executive Dr Carmelo Ferlito was blunt in his assessment, describing the handout as neither transform ative for household consumption patterns nor meaningful for equity markets. “While the measure is costly at the aggregate level, it is not a needle mover at the micro level,” he Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

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Singapore and the Philippines. “We’ve got no regulation here (Malaysia) now. Internally, what ever we develop, our risk manage ment frameworks, our business strategies, compliance framework, is based on what we’ve done in other markets.” Inderjit said when Malaysia’s Consumer Credit Act comes into force, only minor adjustments will told SunBiz . “I struggle to see how RM100 can affect consumption patterns in any sensible way. Economically, it hardly has any logic behind it and appears to have more of a political flavour.” Ferlito also raised concerns over the potential inflationary effects of injecting cash into the economy, particularly if such policies become frequent. “Monetary injections are the real cause of inflation, a permanent and generalised increase in prices due to the quantity of money growing faster than economic output,” he said, adding that such measures risk masking structural issues in household income and consumer demand. From a sectoral perspective, Dr Ida Yasin, economist at Universiti Putra Malaysia, said the RM100 payment is more likely to generate a temporary boost for retailers and wholesalers rather than driving sustained gains in the stock market. “This voucher is to boost demand for goods and services in Malaysia, not so much the demand for stocks,” she said. “Retail and wholesale demand could rise temporarily, especially in

Additionally, under the new law, the Ministry of Housing and Local Government will be responsible for licensing syariah-compliant pawn broking ( Ar-Rahnu ) and syariah compliant credit facilities. RM100 aid ‘short-term consumption booster but not major market mover’