Task force deputy head Azryta Abdul Aziz said the survey, which collected data from 10 BNPL providers, showed the total credit amount extended by providers stood at RM1.4 billion at the end of the first quarter of 2024.
She said this was relatively small compared to the outstanding balance of credit card services as a whole, which stood at RM45.5 billion at the end of 2023.
Azryta added that BNPL only accounted for 0.07% of the total household debt.
“At this point, we are ‘relieved’ because 97% of the credit is being paid on time, with only 3% recorded one day past due,” Azryta said during a Khazanah Research Institute (KRI) webinar today.
She said the task force aims to monitor the growth of BNPL services to prevent potential misuse, noting that the government is working on the Consumer Credit Act (CCA).
“This Act aims to protect credit consumers and promote a fair, efficient and transparent credit industry by ensuring proper conduct and responsible lending practices among credit providers.
“The Act will also establish the consumer credit commission, which will progressively regulate credit providers, starting with unregulated BNPL providers,” she said.
Meanwhile, KRI senior research associate Shereen Hazirah Hishamudin said that from the first to third quarters of 2023, there were 2.9 million active BNPL users, mostly from the young and middle-aged demographic.
Nonetheless, she warned that the scheme could drive over-indebtedness, possibly shaping a more indulgent and less restrained consumer culture.
Economist Nazari Ismail of Universiti Malaya agreed, likening BNPL services to “encouraging drug users to take drugs to overcome their addiction”.
He added that a study by the university found that BNPL mediates compulsive buying behaviour.
“The study also found that BNPL poses as much, if not more, of a threat than credit cards when it comes to consumer debt management,” he said.
‘BNPL serves the underserved’
However, head of ShopeePay Alain Yee sought to make a case for BNPL services, saying youths are often underestimated in terms of credit responsibility.
Yee said the purpose of the service was to serve underserved users who would not qualify for usual credit schemes.
“We want to give the underserved customers the right amount of credit and steer them towards more responsible financial planning.
“People in the gig economy or those who receive cash salaries find it difficult to access credit through traditional channels, so we want to be able to serve this segment,” he said.
He added that a study by the company found that 82% of respondents would recommend BNPL to friends and family, with 47% reducing borrowing from friends and family, and 43% reducing borrowing from pawnshops.