The Consumer Credit Act 2025 Takes a Further Step Into Force

In brief: A significant piece of Malaysian consumer-protection law has moved further into effect. The Consumer Credit Act 2025 (Act 873) came into force on 1 March 2026, with one important exception: Part V, which deals with the licensing and registration of credit businesses, came into force later, on 1 June 2026. A new Consumer Credit Commission oversees the sector.

This article is general information about Malaysian consumer-credit law for the public.

What is 'consumer credit'?

'Consumer credit' covers the many ways people borrow or pay over time — from loans and credit schemes to increasingly popular 'buy now, pay later' arrangements. As these services have grown, so have concerns about unfair terms, aggressive collection practices, and borrowers taking on debt they cannot manage. The Consumer Credit Act creates a framework to oversee credit providers who were not previously well regulated, with the aim of protecting consumers and bringing order to the sector.

Why does the licensing part matter?

The newly active Part V is particularly important because licensing and registration are the gatekeeping mechanism: they determine who is allowed to offer consumer credit in the first place and set standards they must meet. Once such provisions are in force, businesses in the sector must ensure they are properly authorised or risk operating unlawfully. Buy-now-pay-later providers, for example, were given a window from 1 June 2026 to come into compliance.

Who is affected?

The key players are the regulators tasked with overseeing consumer credit, the wide range of businesses that extend credit to consumers, and the borrowers the law is designed to protect. For lawyers, the Act creates fresh compliance obligations to advise on, and new protections to invoke on behalf of consumer clients.

What happens next?

This is current, in-force law with real consequences for a large and growing industry. What to watch is how rigorously the licensing regime is enforced, how 'buy now, pay later' providers adapt, and whether further parts of the Act are brought into force in due course.

Frequently asked questions

What is the Consumer Credit Act 2025?

It is a Malaysian law (Act 873) that regulates consumer credit — including previously lightly-regulated providers such as buy-now-pay-later services — to protect borrowers and bring order to the sector.

When did it come into force?

Most of the Act came into force on 1 March 2026, and the licensing and registration provisions (Part V) followed on 1 June 2026.

Does it cover 'buy now, pay later'?

Yes. Buy-now-pay-later arrangements fall within consumer credit, and such providers must ensure they are properly licensed or registered under the new regime.

Last updated: 15 September 2026.

This article is published by Khaw Ewe Seng & Co., Advocates & Solicitors (Penang) for general information about Malaysian law. It is not legal advice, and it does not create a solicitor–client relationship. For advice on a specific matter, please consult a qualified lawyer.