Consumer Credit

In Malaysia, the regulatory landscape for non-bank consumer credit is evolving, with the forthcoming Consumer Credit Act (CCA) set to unify a previously fragmented framework. As a firm, our legal services are designed to help non-bank credit providers navigate this complex and changing environment, offering expertise in both conventional and Islamic consumer credit. We provide end-to-end support for a variety of entities, including fintech lenders, Buy Now Pay Later (BNPL) providers, leasing companies, and other credit service businesses.

Our Consumer Credit Services

Our firm provides comprehensive legal and strategic advice for non-bank credit providers, ensuring they remain compliant and competitive in Malaysia's rapidly evolving market.

Conventional Consumer Credit

• Licensing & Regulatory Compliance: The new CCA will require non-bank credit providers to be licensed or registered by a newly formed Consumer Credit Commission (CCC). We guide clients through the entire application process, helping them fulfill the stringent requirements for financial health, corporate governance, and responsible lending practices. We also assist with ongoing compliance with the Act's provisions, including those related to advertising, fair contract terms, and debt collection practices.
• Structuring of Offerings: We advise on the legal structuring of various credit products, such as BNPL schemes, personal loans, and credit sales agreements. This includes drafting compliant and transparent credit agreements that adhere to the new standards for disclosure, fees, and interest rates.
• Commercial Agreements: We assist in drafting and negotiating commercial arrangements with partners, including technology providers, marketing platforms, and debt collection agencies.
• Enforcement & Dispute Resolution: We provide counsel on best practices for loan enforcement and debt recovery, ensuring compliance with the CCA's new rules on repossession and handling consumer hardship applications.

Islamic Consumer Credit

The Islamic finance sector in Malaysia operates under a dual legal framework, governed by the Islamic Financial Services Act 2013 (IFSA) and the upcoming CCA. This requires a nuanced understanding of both Shariah principles and statutory regulations.

• Shariah-Compliant Structuring: We help non-bank providers structure Islamic consumer credit products based on various Shariah principles, such as Tawarruq (commodity murabahah) for personal financing or Ijarah (leasing) for asset financing. We ensure all products and processes are compliant with the requirements of Bank Negara Malaysia's Shariah Advisory Council.
• Registrar of Islamic Credit Providers: Under the new CCA, a dedicated Registrar will be established to oversee Islamic credit activities. We assist clients in navigating the licensing and compliance requirements specific to this framework.
• Product Development & Documentation: We advise on the entire lifecycle of an Islamic credit product, from the initial concept to the drafting of Shariah-compliant contracts and disclosure documents. Our services ensure that financing charges, risk-sharing mechanisms, and late payment clauses are structured to avoid Riba (interest) and Gharar (excessive uncertainty).
• Compliance & Governance: We help implement robust internal governance and audit frameworks to ensure continuous adherence to Shariah principles and regulatory standards.

Our competitive edge is our ability to provide a seamless service for both conventional and Islamic credit businesses. We possess a deep understanding of the evolving legal landscape and offer practical solutions that help our clients thrive while maintaining the highest standards of consumer protection and regulatory integrity.