Risking the financial health of future retirees
In a written reply in Parliament last Wednesday, Prime Minister Datuk Seri Anwar Ibrahim said that amount was withdrawn by more than 4.6 million EPF members, or 35.1% of members under 55.
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The Star
27 minutes ago
- The Star
Spend now, stress later: The double-edged sword of buy-now-pay-later deals for Malaysians
Ever been caught off-guard by an unexpectedly large bill at the end of an online shopping spree? For seasoned shopaholics sticker shock is nothing new, but for some Malaysians who have just been introduced to the world of easy deferred digital payments, those readily accessible impulse buys (a few ringgit here, a few ringgit there) can quickly snowball into a financial burden. Faced with bills they simply cannot afford to repay, many then resort to taking out one personal loan after another to pay each subsequent debt off, inadvertently becoming ensnared in a vicious cycle of ever worsening debt. Posts about late payment notices, account freezes, and strategies to shuffle debt between various fintech creditors pepper a Facebook group centred around buy-now-pay-later (BNPL) apps. In the same feed, anonymous users outline the debts weighing on them and the anxiety of working to pay them off, side-by-side with posts from others celebrating their new account getting approved or gushing about the next BNPL deal. According to Dr Paul Anthony Maria Das, a senior lecturer at the Taylor's University School of Accounting and Finance, such stories have become a dime a dozen in recent years, especially among young working adults and low-income earners. From Paul Anthony's point of view, the rise in popularity of BNPL among Gen Z and Millennials has not been matched with a deeper understanding of the cost structure and the real consequences of late payments. — Taylor's University 'The growth of digital consumption, combined with the economic aftershocks of the pandemic, has led many to embrace BNPL and instant loans as a financial cushion. 'My biggest concern is that the use of BNPL is becoming habitual and normalised, rather than being viewed as a temporary support tool,' he says. The first half of 2025 alone saw RM9.3bil worth of recorded BNPL transactions, a 31% increase from RM7.1bil in the second half of 2024, according to Finance Minister II Datuk Seri Amir Hamzah Azizan. The Credit Counselling and Debt Management Agency (AKPK) warns that many consumers, drawn in by the accessibility of such services, may not fully grasp their consequences. 'Many Malaysians, especially young adults, may underestimate the long-term impact of using BNPL or quick loans. These services may seem convenient, but without financial literacy, they can easily become a debt trap,' the agency says. From Paul Anthony's point of view, the rise in popularity of BNPL among Gen Z and Millennials has not been matched with a deeper understanding of the cost structure and the real consequences of late payments. 'Many see it as a cost-free way to defer payments, unaware that missed instalments can trigger penalty fees. 'According to the Consumer Credit Oversight Board (CCOB), while 88% of users repay on time, the remaining 12% hold overdue debts amounting to a staggering RM121.8 billion. 'Of these users, 70% earn less than RM5,000 per month, making them highly susceptible to financial shocks,' he says. Similarly worried about the trend is Mohammad Ridzuan Abdul Aziz, an industry advisory panel member with the Asia Pacific University of Technology and Innovation (APU). He points out the generally low level of financial literacy among Malaysian consumers, alongside the low awareness of their rights as consumers. 'Borrower rights are not properly protected as the terms and conditions differ from one type to another type of lender, under the current (disjointed) regulatory framework,' he says, adding that most users are unaware of the common pitfalls related to BNPL providers. Finance Minister II Datuk Seri Amir Hamzah Azizan notes that while some BNPL creditors do not impose interest, others charge 1.5% a month, or equivalent to 18% annually, and some even have annual rates as high as 30%. (For context, credit card interest rates can only go up to a maximum of 1.5% per month, the equivalent of 18% per annum across the board, according to Bank Negara Malaysia.) Paul Anthony further notes a major rise in BNPL use for consumer items like electronics, clothing, and travel, rather than medical expenses or emergencies, which highlights a 'cultural shift toward borrowing for convenience rather than necessity'. He adds that the sheer ease of borrowing has served as a double-edged sword in a way, obfuscating the burden of what will eventually need to be paid back. 'People often do not track how much they owe across platforms, which can lead to financial stress or even default. For many in the B40 group, even a small delay in income or unexpected expense can trigger a default chain reaction,' he says. Approaching regulation Mohammad Ridzuan believes that a major concern is how BNPL operators were previously not required to be licensed in Malaysia. Mohammad Ridzuan believes that a major concern is how BNPL operators were previously not required to be licensed in Malaysia. — APU This is something the government seeks to remedy with the passing of the Consumers Credit Bill 2025 in the Dewan Rakyat last month. The Bill saw the formation of the Consumer Credit Commission (CCC), which now seeks to develop a code of conduct for credit practices, including those offered by BNPL apps, aiming to implement structured licensing and registration in unregulated sectors. As reported by The Star on July 22, Deputy Finance Minister Lim Hui Ying said that under the CCC's frameworks, BNPL providers are required to report the credit data of their customers to credit reporting agencies, such as Credit Tip-Off Service (CTOS), via a centralised database. AKPK says that it supports the move, stressing that they represent key steps in providing protections to Malaysians from unregulated and irresponsible lending practices. 'These frameworks will regulate BNPL, instant credit facility, and other emerging credit services that currently fall outside traditional financial regulations,' the agency adds. Alongside the regulatory move, Paul Anthony believes that there needs to be urgent attention given to consumer awareness and behaviour. 'Financial literacy among Malaysians, particularly within the B40 segment and younger demographics, remains low. Many do not fully understand the cost implications of BNPL or the importance of credit scores and repayment timelines. 'Without nationwide financial education campaigns and stronger financial capability building efforts, we risk repeating a cycle of compliance without comprehension. 'Furthermore, enforcement mechanisms must be robust and agile. For example, monitoring 16 BNPL providers especially as more emerge requires institutional capacity and data integration,' he says. Mohammad Ridzuan concurs: 'The current state of a disjointed non-bank consumer credit ecosystem that is governed and administered by three different ministries desperately needs to be revamped, realigned, and cautiously restructured, as it creates a regulatory arbitrage, ineffective supervision, and allows indiscriminate behaviour by the lenders towards their consumers. 'It puts consumers at a higher risk of not being adequately protected by the existing regulatory framework, and financially paying more compared to those who are using credit cards and/or obtaining loans from banks,' he adds. Paul Anthony further calls for transparency in the decision-making process on future credit ceiling and interest caps, along with data privacy measures to ensure that the centralised credit data system is not misused. Credit challenges Other overlooked areas are the weak understanding of repayment terms and compounding fees, as well as a limited awareness on how BNPL is expected to impact credit scores, particularly with reporting to CTOS, says Paul Anthony. 'The persistent lack of clarity around fee structures and repayment obligations highlights a critical financial literacy gap, one that the new Consumer Credit Commission (CCC) must urgently address through focused public education and transparent provider practices,' he says. This is not to say that BNPL offerings are strictly something to avoid. As laid out by Mohammad Ridzuan, there are both positives and negatives. 'It is good for consumers who understand the terms and conditions of these credit facilities, their purposes, and it is commensurate with their capability to service the repayment obligations timely and diligently, as well as their rights from a legal perspective. 'However, it could be otherwise for consumers who failed to understand the legal terms and conditions, their rights, and are unable to repay timely and adequately.' Paul Anthony further notes a major rise in BNPL use for consumer items like electronics, clothing, and travel, rather than medical expenses or emergencies, which highlights a 'cultural shift toward borrowing for convenience rather than necessity'. — Pixabay Citing data from the CCOB task force, Mohammad Ridzuan further says that BNPL and instant loans are the most attractive to consumers who are not eligible for credit cards, those who need short-term cash management, and impulsive shoppers. Paul Anthony too believes that such fintech credit solutions could serve those with irregular income flows like gig workers, freelancers, or those in between pay cycles who might find themselves temporarily cash-constrained. This is due to their level of accessibility, speed of approval, and minimal documentation in comparison to traditional bank loans. But this does not come without risk. 'Unlike traditional financial institutions, BNPL providers often lack stringent credit checks, allowing users to easily accumulate multiple short-term debts across different platforms without fully realising their total liabilities. 'This fragmentation increases financial vulnerability. Additionally, as BNPL delays the 'pain of paying', users can become psychologically detached from the actual cost, leading to chronic overconsumption, poor financial planning, and long-term indebtedness,' he says. Paul Anthony acknowledges that while such options can help with temporary liquidity gaps, they are not suited to the long-term, or for those without stable income or budgeting discipline. He adds that: 'The key issue is not the product itself, but how it is used and understood by the consumer.' Back on track When it comes to using these fintech credit options responsibly, Paul Anthony suggests treating them like any other form of debt, with 'careful planning of repayments, having discipline, full understanding of repayment terms, and limiting usage'. He recommends against engaging with too many BNPL platforms at the same time, as it can easily lead to confusion and result in financial strain, while also making sure to avoid missed payments to avoid penalties or damage to credit scores. 'If an individual is already juggling other debts, adding a new BNPL obligation can be risky. In such cases, it is wiser to pause and reassess financial priorities before proceeding. 'To stay on top of commitments, consumers are encouraged to use budgeting apps or financial planning tools to monitor all monthly obligations,' he says. Paul Anthony adds that anyone currently struggling with debt should start by taking stock of all their commitments, including the amount owed, the providers, repayment terms, and due dates. 'This comprehensive overview allows for better planning and decision-making. Once this is done, prioritise repayments, especially those with higher penalties or the potential to negatively impact your credit record. 'It is important to reach out to BNPL or loan providers to explore options for repayment restructuring, deferment, or even consolidation, which can ease the monthly burden,' he says. He also advises refraining from making new BNPL purchases or taking out any new loans during the recovery process, and instead to make adjustments such as revising budgets to 'cut non-essential expenses and redirect funds toward clearing existing debts' and 'cancelling unused subscriptions or reducing discretionary spending'. Meanwhile, Mohammad Ridzuan points to AKPK – which offers Malaysians free, confidential guidance on managing and overcoming debt – as another resource for those who need help with their finances. The agency also assists with renegotiating existing debts with licensed banks, and provides advice after restructuring personal debts. At the end of the day, however, he believes that it is up to consumers to be disciplined with their debt management. 'Without their willingness to improve their knowledge of personal finances, no external facilitation would be able to facilitate improvement in their debt management matters,' he says. He further advises to avoid spending beyond their means, noting that most consumers get into trouble due to the impulse to chase instant gratification. Paul Anthony's wish is for Malaysians to understand that borrowing is a liability, and that 'every sen borrowed must be repaid, often with additional costs'. 'The ease of access to credit today, especially through digital platforms, has blurred this line,' he says, stressing that a 'well-managed loan can improve your financial position, but uncontrolled borrowing can be devastating'. 'It is not just about knowing the mechanics of BNPL or instant loans, it is about recognising when not to borrow. 'Empowering people with this mindset, especially from a young age, is the most powerful debt prevention tool we have,' he says.
Malaysiakini
an hour ago
- Malaysiakini
Shops for foreigners, bribes for officers, losses for rakyat
COMMENT | Across our towns and cities, foreign shops are mushrooming. Indonesians run kedai Acheh. Bangladeshis have minimarts. Myanmar nationals set up stalls and eateries. They serve their own people, not Malaysians. And many of them operate outside the law. While locals have KK Mart, 99 Speedmart, pasar malam or shopping malls, these outlets cater almost exclusively to...
The Sun
2 hours ago
- The Sun
M'sian man criticises VM2026 billboards' simple design and domestic promotion
A Malaysian man recently shared his grouses over the Visit Malaysia 2026 billboards, criticising its simple and plain design. Shared on Threads, an image of the billboard attached showed the Visit Malaysia 2026 logo alongside its mascots, two sun bears, official website and social media tags all in front of a plain white background. 'First of all, the billboard's message is empty. Logo, tagline and mascots but that's it? There are no iconic pictures, no beautiful scenery, nothing that makes people say 'Wow. I want to go to Malaysia',' said the post. The second pointed shared was the location of the billboards, he was wondering what is the point of promoting Malaysia to its own people when the main target market is international tourists. He also raised the budget, saying that the millions of ringgit spent was wasted on promoting it in Malaysia. 'When I look back on it, this campaign feels like Malaysia promoting Malaysia to Malaysians. 'Who approved of this strategy and what is the actual return on investment (ROI) in putting these billboards in (Malaysia)? If they want to attract tourists, showcase Malaysia at a global stage, not to Malaysians who are already in Malaysia,' he added. While many shared similar sentiments, other users shared that the government has made efforts to promote Malaysia's tourism in different countries such as Kazakhstan, Dubai and London. Others also shared their own thoughts on the placements and design, with some believing that the local VM2026 billboards could serve as an effort to encourage domestic tourism while in regards to the design, some believe that the minimalist design was easier on the eyes especially since the billboards are placed on highways and major roads. Meanwhile, commenters also speculated that the simple design could be a teaser to raise awareness of the Malaysian government's tourism campaign for VM2026. 'I believe that the billboard is a teaser meant to raise awareness among Malaysians — a straightforward message.A billboard full of design elements doesn't necessarily determine whether people will be interested, let alone make them stop and stare at it for a long time, especially in high-traffic areas,' said a user. 'Personally, I believe that the billboard is not a full-on advertisement but could be a teaser and tourism campaigns are executed in phases. The current billboards are probably at the awareness phase,' a commenter speculated. 'I reckon the marketing agency designed this advertisment with mascots, typography, a tagline, and a white background to keep it simple and minimalistic because our brains notice clean, simple designs more easily, especially in busy places like streets or city areas,' another commented.
