RAM: Malaysia’s Consumer Credit Act 2025, a credit positive for securitisation and non-bank credit providers

Published on 02 Oct 2025.

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The recent enactment of Malaysia’s Consumer Credit Act (CCA) 2025 marks a pivotal development in the nation’s consumer credit landscape, introducing a centralised regulatory framework that is expected to enhance credit quality and investor confidence across the asset-backed securities market.

These perspectives were shared in RAM Ratings’ latest publication, New Consumer Credit Act to Strengthen Oversight on Non-Bank Credit Providers, Bolster ABS Investment Confidence, highlighting the landmark milestone as positive for this asset class. Malaysia’s non-bank credit market is sizeable at an estimated at RM15 billion. Of this, buy-now-pay-later (BNPL) alone accounted for RM9.3 billion in transactions in H1 2025, almost a one-third increase from the previous corresponding period. Based on government estimates, approximately 250 entities – and as many as 16 BNPL providers serving some 6.5 mil accounts – are expected to fall under the Consumer Credit Commission’s (CCC) oversight as the centralised licensing and supervisory body. 

“The establishment of a uniform regulatory standard for consumer credit is credit positive for the sector and securitisation transactions backed by consumer receivables – including BNPL products and pawnbroking loans – and sponsored by cooperatives, non-banking financial institutions (NBFIs) and digital financial lenders”, says Sophia Lee, senior vice president of financial institutions ratings. Lim Chern Yit, senior vice president of RAM’s structured finance ratings group concurs. “In our view, the Act is expected to increase standardisation of credit origination, risk governance, and reporting, which will enhance transparency and improve investor confidence in these asset classes”, he adds.

This is especially relevant in Malaysia’s vibrant Islamic capital market, where sukuk and asset-backed securities linked to salary-deduction consumer financing often issued by cooperatives and NBFIs now have the will be more aligned with more consistent and transparent regulatory standards under the new Act. Digital financiers will also need to eventually comply, with the market having already seen several bonds and sukuk issuance backed by BNPL portfolios. As at end-September, RAM’s rated portfolio of consumer credit-related issuers had approximately RM15.1 bil outstanding in bonds and sukuk.

While the agency expects the CCA to strengthen long-term credit fundamentals and market resilience, near-term challenges remain. Smaller originators, particularly cooperatives and small medium enterprise-based lenders, may face higher compliance costs and operational adjustments. Nevertheless, the Act is viewed as a constructive reform that will enhance accountability, transparency, and responsible growth in Malaysia’s non-bank credit sector.

RAM will continue to monitor regulatory developments and assess their impact on issuer credit profiles, structured finance performance, and sukuk resilience as the CCA is implemented through 2031.

The full report can be found at www.ram.com.my and is available for download here.

 

Analytical contacts
Lim Chern Yit
(603) 2708 8302
chernyit@ram.com.my

Sophia Lee
(603) 2708 8211
sophia@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my

 

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