BNM Wants Malaysians To Seek Financial Education Before Taking Big Loans

Bank Negara Malaysia (BNM) has made a staggering announcement. According to a recent policy update, Malaysians who are seeking personal loans that are above RM100,000 will be required to attend a mandatory financial education module. This policy is expected to take effect from 2027 onwards.

BNM states that these big loan borrowers will have to complete the session – which will have to be conducted by either their lender or the Credit Counselling and Debt Management Agency (AKPK). Said session is designed specifically to help borrowers make more informed financial decisions.

In addition to this, lenders are also being empowered to recommend these financial education sessions to customers that they deem “high-risk”, regardless of the amount being borrowed.

The new policy also imposes stricter disclosure requirements on the lenders. This is good news for borrowers and lenders will now have to inform them of the effective interest rate. This makes it more clear as to how much customers will actually be borrowing.

BNM says that the changes to the policy is a necessary measure to combat problems stemming from lending practices that are contributing to unsustainable household debt.

Due to fierce competition between lenders, many promotions and offers tend to look cheaper and more affordable at first glance, but can result in excessive debt and financial hardship for customers who are not financially savvy.

Ultimately, the new rules are aimed at strengthening consumer safeguards and will apply to all licensed banks, Islamic banks, and development financial institutions.