PETALING JAYA: With 40% of Malaysians underserved by bank services, overly strict regulations could push them to illegal moneylenders, said Consumer Credit Oversight Board Task Force (CCOB-TF) deputy head Azryta Abdul Aziz.
“I think you are aware that 40% of the Malaysian population are underserved by banks. If regulations are too stringent, this 40% will go underground and turn to illegal money lenders, which will have a more negative impact on society,” she said during the Khazanah Research Institute webinar, “Redefining Credit: The Rise of Buy Now, Pay Later (BNPL) in the Consumer Credit System” today.
Azryta said current regulations require quarterly submission of data from BNPL providers. “And we are monitoring it very closely. Statistics such as DPDs (Days Past Dues), NPL (non-performing loan) levels and the amount being extended are what we are focusing on at the moment.”
She stressed that a balanced approach is essential to ensure regulations protect consumers without negative consequences.
“In relation to how the Consumer Credit Act (CCA) could have a positive impact on household debt ... my point about ensuring that providers undertake proper affordability assessment,” she said.
Azryta noted that these assessments go beyond traditional creditworthiness by analysing factors such as past purchase behaviours and payment history before extending credit to consumers.
“We require that if a provider is extending credit of more than RM1,000 at any time, they must perform an affordability assessment on the potential customer. Affordability assessment is not just about creditworthiness, as I mentioned earlier, but a more intensive evaluation. It considers your past purchase behaviours, your phone usage, your contacts and whether you’ve been paying on time,” she explained.
Azryta also emphasised that current risk mitigation measures are quite stringent. “The minute you don’t pay, they just stop the credit to you. And then of course they have debt collectors to come in or they have their own internal collection process,” she said.
Furthermore, she highlighted that access to future credit is restricted if customers are not financially disciplined in making payments.
“We hope that conducting these assessments before extending credit will help control household debt, preventing impulsive spending,” she concluded.
Azryta also mentioned that the artificial intelligence adopted by BNPL providers can analyse customer behaviour using data points to assess whether credit extension is appropriate.
