In September, the Dewan Negara passed the Consumer Credit Bill 2025, which will regulate BNPL schemes.
AS Malaysia works to strengthen financial resilience among the public, the focus is shifting from simply knowing about money to building the habits and systems that support better financial wellbeing. With the launch of the National Strategy for Financial Literacy 2026–2030 (NS2.0) and a series of policy reforms targeting wages, savings and debt, changes are underway to help Malaysians, especially young adults, move from awareness to action.
“Many people know what they need to do with their finances, but they don’t feel like they are able to do it. NS2.0 highlights the connection between financial literacy and financial resilience,” says Universiti Malaya senior lecturer Dr Ahmad Muhaimin Mat Jusoh.
“This shows that beyond acquiring financial knowledge, individuals should also practice financial wellbeing - how they plan, behave, and emotionally respond to their finances,” adds Ahmad Muhaimin, whose areas of research include digital financial literacy and consumer behaviour.
Assistant Professor Dr Nurwahida Mohd Yaakub of Heriot-Watt University Malaysia says that NS2.0 marks a strategic shift from raising basic financial knowledge under NS1.0 to enforcing measurable behavioural change and accountability.
“NS2.0 is highly relevant to young Malaysians through its focus on SP2 (Debt Management), which addresses rising financial stress among youth, and SP4 (Digitalisation & Safety), which helps protect digitally active youths from scams and fraud,” says Nurwahida, a specialist in financial literacy and behavioural finance.
She adds that initiatives like FEN Proaktif help final-year students build financial discipline before entering the workforce and establish good habits early on.
Reforms to strengthen financial resilience
In addition to consolidating financial literacy programmes under the NS2.0, the government has, in recent years, introduced reforms addressing low wages, encouraging savings and regulating youth debt.
The 13th Malaysia Plan (13MP) includes a proposal for the Employees Provident Fund (EPF) to introduce a monthly pension scheme in addition to the current lump-sum withdrawal option, a hybrid model which aims to provide retirees with a more stable income stream. This will help stretch savings, as one in four members exhaust their EPF savings within five years of retirement. Among its many programmes, the pension fund offers initiatives such as the i-Saraan for self-employed and gig workers, and i-Sayang, which allows husbands to channel 2% of EPF contributions to their wives.
On the wage front, measures are being rolled out to close the disparity gap. Along with the full enforcement of the minimum wage order at RM1,700 a month, the Progressive Wage Policy aims to raise incomes in line with productivity. The Gig Workers Bill seeks to protect freelancers, riders and e-hailing workers with stronger rights. The recent budget allocated RM1.8bil to upskill Malaysia’s workforce and encourage better pay while the New Investment Incentive Framework (NIIF) was introduced to attract investments that create quality jobs and develop local talent.
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Beyond the classroom
According to Nurwahida, strengthening youth financial resilience requires more than classroom concepts: it calls for structural, policy and cultural shifts.
She suggests making financial literacy a mandatory, credit-bearing module in universities, with a focus on behavioural economics to help students recognise common biases in money decisions. She also proposes safeguards such as financial counselling or digital prompts before young adults take on major loans.
Nurwahida: Proposes for safeguards such as financial counselling or digital prompts before young adults take on major loans.
Culturally, Nurwahida says Malaysia must normalise seeking professional advice and promote trust in formal advisory services like the Credit Counselling and Debt Management Agency (AKPK), which provides solutions to businesses and individuals facing difficulty managing debt, so youths rely less on informal guidance and make more informed financial choices.
“The Malaysia Financial Literacy and Capability Index (FCI) Survey confirms a paradox: financial knowledge scores have improved, but this has yet to adequately translate into resilient behaviour. The true measure of the NS2.0’s success will not be a higher test score, but a quantifiable improvement in objective financial resilience metrics, such as the percentage of youth who can cover a major unexpected expense without borrowing,” she explains.
BNPL pitfalls
While policies to boost savings are welcome, young Malaysians must also be wary of debt traps.
“Young people use e-wallets, online banking, and investment apps every day. But being good with technology doesn’t mean they really understand money,” says Ahmad Muhaimin.
“Knowing how to use an app is one thing, but understanding how it affects your spending is another. The Buy Now Pay Later (BNPL) trend makes spending feel painless. When you tap or click, you don’t feel the money leaving. So you tend to spend more than you planned to,” he says.
In September, the Dewan Negara passed the Consumer Credit Bill 2025 which will regulate BNPL schemes. Through amendments to the Bankruptcy Act in 2023, debtors under 40 who satisfy certain low-debt thresholds can now receive automatic discharge, easing the burden on younger borrowers.
Ahmad Muhaimin welcomes regulators’ move to address risks, particularly BNPL.
“This is a crucial step toward stronger consumer protection and responsible lending. It’s not fully implemented yet, but it’s heading in the right direction,” he says.
Stepping up protection
One area that needs more attention is protection against unexpected events, says Ahmad Muhaimin.
“I get why many young people don’t think about insurance or takaful yet. When you’re just starting out, you focus on what’s in front of you: bills, rent, petrol. But I’ve seen how hard it can be when something sudden happens and there’s no protection. It’s not about buying a policy; it’s about peace of mind. That’s why NS2.0 highlights micro-insurance and micro-takaful, which are simpler and cheaper, so young people and gig workers can afford basic coverage” he says.
Ahmad Muhaimin: Young people who go through proper financial education not only handle money better but also feel more confident.
Ahmad Muhaimin’s research finds that those with strong financial education are more open to talking about money and are less anxious about finances.
“Young people who go through proper financial education not only handle money better but also feel more confident. Education is the foundation. When you build it right, behaviour, culture, and policy, will naturally follow. This is how we create a generation that can handle money wisely and stay strong during tough times.”
