KUALA LUMPUR: The government will speed up the formulation of the Consumer Credit Act to protect the interests of consumers and promote a healthy credit market, Tun Dr Mahathir Mohamad said.
The Prime Minister said the Act is important to ensure credit users receive fair treatment when dealing with creditors.
“(It will be tabled in Parliament) This year, as soon as possible,” he told reporters after launching the National Strategy for Financial Literacy 2019-2023, here today.
Earlier in his keynote address, Dr Mahathir said the Act was being drafted through the cooperation of the Ministry of Domestic Trade and Consumer Affairs, the Ministry of Housing and Local Government, the Ministry of Entrepreneur Development, Bank Negara Malaysia, Securities Commission Malaysia, and other agencies related.
On the launch of the National Strategy for Financial Literacy, he said it would complement the Act in protecting credit users in the country.
“The effort to enhance financial literacy has become very important and is complementary to the Consumer Credit Act initiative to strengthen the credit consumer protection framework in Malaysia,” he said.
He said the ability to make financial decisions wisely is not only relevant when it comes to making loans or buying financial products alone.
“The ability to make sound financial decisions in buying insurance protection, investing and managing earnings will certainly would help the people to live without financial pressure,” he said.
The Prime Minister said even though the risk of household debt, which currently stands at 82.1 per cent of the Gross Domestic Product, on domestic financial stability is under control, there have been signs of difficulties among borrowers to repay debts.
“This affects borrowers earning less than RM5,000 a month and living in urban areas,” he said.
He said this observation was also supported by the increase in the number of borrowers participating in the Debt Management Programme offered by the Credit Counseling and Debt Management Agency.
Dr Mahathir said in this increasingly complex and challenging financial environment, the ability to protect oneself from unfair market practices or any form of financial fraud requires users to better understand the forms and modus operandi of financial crimes.
“In line with the advancement of technology utilisation in the provision of financial services, consumers also need to equip themselves with the best practices of technology so as not to be exposed to increasingly sophisticated cyber threats,” he said.
Dr Mahathir said financial literacy and skills among consumers would also contribute to the creation of a developed, robust and consumer-friendly financial industry.
“Financial literacy and skills are among the factors that can contribute to sustainable and inclusive economic growth.
“Financial literacy and skills are the first line of defence for consumers to protect their rights when dealing with unfair market practices,” he said.
The financial literacy strategy was formulated by the Financial Education Network (FENetwork), a group comprising several agencies led by Bank Negara Malaysia and the Securities Commission Malaysia.
The group is also made up of the Ministry of Education, the Malaysia Deposit Insurance Corporation, the Employees Provident Fund, the Credit Counseling and Debt Management Agency, and Permodalan Nasional Bhd.
The strategy underlines priorities and action plans to equip Malaysians with the knowledge to make financial decisions based on adequate information and foster a prudent attitude in financial management. – Bernama