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Country Report

Malaysia Flag Consumer Lending in Malaysia

| Pages: 14

Price: US$1,900

About this Report

EXECUTIVE SUMMARY

Stringent lending guidelines rein in growth in consumer loans

In a bid to rein in household debt, the government imposed more stringent lending guidelines in 2012. Coupled with marginally lower real GDP growth, gross lending and outstanding growth for overall consumer credit resulted in a slowdown in 2013. With other lending such as housing loans under their names, applying for auto loans became more difficult for borrowers despite earning a decent income. With the tighter credit card regulations imposed by the central bank, some consumers turned to personal loans for big ticket purchases. However, the growth in gross lending of personal loans is not significantly high as banks are still cautious when it comes to approving loans for borrowers.

Mixed reaction for mortgage loans due to lending guidelines and schemes

As a result of the tighter lending guidelines, mortgages for affordable housing are to be adversely impacted as borrowers are usually from the low to middle-income groups who are not affluent. In addition, job seekers who are looking to purchase their new homes might encounter difficulty in securing housing loans amid the strict regulations. The lending guidelines also lengthened the entire housing loan process due to a greater submission of documents that are required for the loan approval. However, this sends a mixed signal to borrowers as there are introductions of more schemes such as My First Home Scheme which provide people with the opportunity to own their first residential properties. In addition, the individual income limit will be increased from RM3,000 to RM5,000 from January 2013, while the requirements for a saving record of three month’s instalment and minimum employment of six months will be abolished to benefit more first-time buyers.

Competition among local and foreign lenders intensifies

Fierce competition between the foreign banks and local financial institutions is evident when it comes to card lending. Foreign banks such as Citibank, United Overseas Bank and Standard Chartered Bank have enhanced the attractiveness of their lending rates and marketing promotional activities in order to compete head on with local banks such as CIMB, Malayan Bank and Hong Leong Bank. However, local banks and non-banks companies have a competitive edge over foreign banks, particularly in consumer loans such as auto loans and other personal loans. It can be attributed to the strong brand recognition and trust from the loyal customers of these local financial institutions.

Non-performing loans witness a slowdown in value share

With the successful implementation of the lending guidelines by Bank Negara Malaysia, non-performing loans for outstanding balance registered a decline in 2013. In addition, it is an indication that the lending guidelines did not have an adverse impact on the quality of the existing card and non-card lending at the end of the review period. Most of the financial institutions posted improvement in their non-performing loans which is the result of good financial management and stricter loan approval in order to ensure that the borrowers have the capability to repay their loans.

Slower outstanding balance growth expected over forecast period

Over the forecast period, the household debt is expected to be controlled with outstanding balance of consumer credit registering a slower constant value CAGR. Through the education on better financial management, coupled with the strict lending guidelines, consumers are expected to have better knowledge of the risk and commitments needed to undertake loans over the forecast period. In order to vie for a bigger share in the consumer loans, banks and other financial institutions are expected to step up their marketing campaigns and introduce consumer loans with attractive lending rates over the forecast period.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Consumer Lending industry in Malaysia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Consumer Lending industry in Malaysia, our research will save you time and money while empowering you to make informed, profitable decisions.

The Consumer Lending in Malaysia market research report includes:

  • Analysis of key supply-side and demand trends
  • Historic volumes and values
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Consumer Lending in Malaysia?
  • What are the major trends set to impact the market in Malaysia?
  • What capacity for consumer debt still exists in the market?
  • What’s the state of credit quality in the market?
  • Has the economic downturn reset the lender competitive landscape?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

Euromonitor’s industry reports, including Consumer Lending in Malaysia, originate from our database within our Consumer Finance market share and market size database, Passport, a platform which analyses Consumer Finance in 46 countries and globally.

Table of Contents

Consumer Lending in Malaysia - Industry Overview

EXECUTIVE SUMMARY

Stringent lending guidelines rein in growth in consumer loans

Mixed reaction for mortgage loans due to lending guidelines and schemes

Competition among local and foreign lenders intensifies

Non-performing loans witness a slowdown in value share

Slower outstanding balance growth expected over forecast period

KEY TRENDS AND DEVELOPMENTS

Tight regulations continue to rein in gross lending growth in mortgage loans

Local financial institutions maintain competitive edge over foreign lenders

Declining value share for non-performing loans in consumer lending

MARKET DATA

  • Table 1 Consumer Lending: Outstanding Balance by Category: Value 2008-2013
  • Table 2 Consumer Lending: Outstanding Balance by Category: % Value Growth 2008-2013
  • Table 3 Consumer Lending: Gross Lending by Category: Value 2008-2013
  • Table 4 Consumer Lending: Gross Lending by Category: % Value Growth 2008-2013
  • Table 5 Consumer Lending: Non-performing Loans Outstanding Balance: % Value 2008-2013
  • Table 6 Mortgages/Housing: Non-performing Loans Outstanding Balance: % Value 2008-2013
  • Table 7 Consumer Credit: Non-performing Loans Outstanding Balance: % Value 2008-2013
  • Table 8 Card Lending: Non-performing Loans Outstanding Balance: % Value 2008-2013
  • Table 9 Forecast Consumer Lending: Outstanding Balance by Category: Value 2013-2018
  • Table 10 Forecast Consumer Lending: Outstanding Balance by Category: % Value Growth 2013-2018
  • Table 11 Forecast Consumer Lending: Gross Lending by Category: Value 2013-2018
  • Table 12 Forecast Consumer Lending: Gross Lending by Category: % Value Growth 2013-2018

SOURCES

  • Summary 1 Research Sources

Consumer Credit in Malaysia - Category Analysis

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

CATEGORY DATA

  • Table 13 Consumer Credit: Outstanding Balance by Category: Value 2008-2013
  • Table 14 Consumer Credit: Outstanding Balance by Category: % Value Growth 2008-2013
  • Table 15 Consumer Credit: Gross Lending by Category: Value 2008-2013
  • Table 16 Consumer Credit: Gross Lending by Category: % Value Growth 2008-2013
  • Table 17 Forecast Consumer Credit: Outstanding Balance by Category: Value 2013-2018
  • Table 18 Forecast Consumer Credit: Outstanding Balance by Category: % Value Growth 2013-2018
  • Table 19 Forecast Consumer Credit: Gross Lending by Category: Value 2013-2018
  • Table 20 Forecast Consumer Credit: Gross Lending by Category: % Value Growth 2013-2018

Segmentation

This market research report includes the following:

  • Consumer Finance
    • Consumer Lending
      • Consumer Credit
        • Card Lending
        • Auto Lending
        • Durables Lending
        • Education Lending
        • Home Lending
        • Other Personal Lending
      • Mortgages/Housing

Statistics Included

For each category and subcategory you will receive the following data in Excel format:

From Passport

  • Market Sizes
  • Consumer Credit by Type
  • Other Personal Lending by Type
  • Non-performing vs Others loans

Market size details:

  • Outstanding balance % growth
  • Outstanding balance local currency, USD, EUR, GBP, CHF, JPY
  • Outstanding balance per capita local currency, USD, EUR, GBP, CHF, JPY
  • Gross lending % growth
  • Gross lending local currency, USD, EUR, GBP, CHF, JPY
  • Gross lending per capita local currency, USD, EUR, GBP, CHF, JPY

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