KUALA LUMPUR: The Consumer Credit Commission (CCC) is studying the plans to adopt a code of conduct for credit practices, including the interest rates charged by providers, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
He also said the Consumer Credit Oversight Board (CCOB) is monitoring developments in the credit industry sector, including interest rates offered through buy-now-pay-later (BNPL) services.
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“The CCC plans to adopt a balanced and proportionate standard of conduct for these credit practices," he said during Question Time in the Dewan Rakyat on Monday (Aug 4).
“There are variations in the interest rates charged by BNPL providers, with some charging 1.5% per month or 18% annually.
"However, in general, the interest rates imposed by BNPL providers are between 15% and 30% annually."
Young Shefura Othman (PH-Bentong) had asked the ministry to state measures taken to regulate BNPL and if there are plans to put a cap on interest rates in the scheme.
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Amir Hamzah also said some BNPL providers do not charge interest, which CCC is taking into consideration in its current regulatory review.
“The Commission will study and analyse the best way to regulate the matter.
“We will also take into account that syariah-compliant loans adhere to established standards,” he added.
Previously, the Credit Consumer Bill was passed in Parliament, leading to the establishment of the CCC as the new authority regulating non-bank credit providers and credit service providers in the country.
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Amir Hamzah said the Act would require companies offering BNPL schemes to adhere to responsible credit conduct and practices to protect credit consumers.
“This includes conducting affordability assessments for credit consumers before offering financing, ensuring fair transaction terms, and imposing charges or fees that are transparent, reasonable, and non-burdensome, as well as practicing prudent and professional debt collection procedures for credit consumers,” he said.
He added that the affordability assessment is a crucial requirement that BNPL companies must comply with before offering credit to ensure that borrowers are able to make repayment.
“If there are any non-compliance issues that harm credit consumers, the CCC has the authority to take appropriate regulatory and enforcement actions.
“It has broad powers to take enforcement action, depending on the seriousness of the violation, such as administrative action, civil enforcement, criminal enforcement, and imposing compounds,” he added.
A survey conducted by the CCOB found that 88% of BNPL scheme users paid their debts on time.
Meanwhile, 12% had overdue debt but were still capable of repaying, and less than 1% were not capable of making good on what they owed.
