Malaysia invests $906.67m to enhance MSME lending, Islamic finance

It also mulls establishing the Consumer Credit Commission.

Malaysia is investing over MYR3.92b (approximately $906.67m) in financial industry-related enhancements, including financing for small businesses and for Islamic finance innovation.

In his Belanjawan 2025 speech, Prime Minister and Minister of Finance YAB Dato’ Seri Anwar bin Ibrahim allotted MYR3.8b ($878m) for micro, small, and medium enterprises (MSEMs).

In particular, the funds are aimed to support digitisation and automation, to embrace sustainable and low carbon practices, and for agrofood production, according to a press release by the Bank Negara Malaysia (BNM), the central bank.

Before this, over MYR7b ($1.6b) were already available for MSMEs .

MYR100m for Islamic finance’s risk-sharing instruments
The government is also launching an MYR100m ($23.1m) matching fund to spur the development of innovation in Islamic finance involving risk-sharing instruments.

The funds will be used “to support risk-sharing financing in the areas of climate and food security.”

It is reportedly in line with the BNM’s efforts to facilitate diverse application of Shariah contracts including risk-sharing contracts.

BNM said that it is also reviewing the standards on Shariah contracts to simplify the framework’s design and policy approach, as part of its bid to spur innovation whilst ensuring effective application of Shariah principles.

Consumer Credit Act
The prime minister also announced that it will table the Consumer Credit Act (CCA) in the next Parliamentary sitting.

The CCA will establish the Consumer Credit Commission (CCC) and will serve as the new authority regulating non-bank credit providers and credit service providers in Malaysia.

Amongst entities it will regulate are buy now pay later companies, non-banking factoring and leasing companies, impaired loan buyers, debt collection agencies, and debt counselling and management agencies.

The commission is expected to address overlaps in responsibilities between regulatory authorities.

It will also reduce coverage gaps in the supervision of consumer credit providers, the BNM said.

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Bank Negara Malaysia

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