This year will not only be a pivotal recovery year for Malaysia, but also a rare opportunity to reform and future-proof the nation, minister says 

by NUR HANANI AZMAN / Pic by MUHD AMIN NAHARUL

THE financial sector must collaborate with the government to bring the economy back into a better position. 

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said now that the national goals are set and the Financial Sector Blueprint 2022-2026 (FSB) is drawn, it is time to act. 

“This year will not only be a pivotal recovery year for Malaysia, but also a rare opportunity to reform and future-proof ourselves. 

“The road ahead will require nothing less than a whole-of-nation approach involving the government, regulators, the private sector, NGOs and the financial community. 

“As in the past, I am confident that the financial sector will rise to the occasion and be a catalyst for reform, drive sustainability and contribute to our collective goal of a ‘prosperous, inclusive and sustainable Malaysia’,” he said the launch of Bank Negara Malaysia’s (BNM) virtual MyFintech Week 2022 conference and the FSB yesterday. 

The FSB is a five-year blueprint that sets out the central bank’s development priorities for the financial sector, anchored on efforts to foster market dynamism and support sustainable development objectives, with a continued focus on its monetary and financial stability mandates. 

Tengku Zafrul believed that the FSB, which complements the 12th Malaysia Plan (12MP), is expected to produce outcomes like advancing digitalisation of the financial sector, providing meaningful choices and access for consumers, increasing the vibrancy of the funding ecosystem to meet Malaysia’s economic needs, and wider adoption of green finance and sustainability practises.

“I also look forward to the upcoming entry of digital banks, digital insurers and takaful operators. Their impact on the development of the nation through the use of technology will improve the wellbeing of Malaysians, foster greater efficiency and contribute towards a more competitive financial landscape. 

“Moreover, conferences like MyFintech Week 2022, with the theme, ‘Advancing Digitalisation for Sustainability, Recovery, and Inclusion’, are not just relevant, but also urgent in our efforts to mobilise the financial sector,” he added. 

Tengku Zafrul said since independence, the financial sector has been critical to the development of the economy and the realisation of the nation’s aspirations. 

Between 2011 and 2020 alone, the adult population with deposit accounts increased to nearly 96% from 82% domestic credit to the private sector as a percentage of GDP increased to 134% from 108%, and e-payment transactions per capita increased to 170 from 49. 

Tengku Zafrul said throughout the pandemic, the financial sector has been instrumental in supporting the people and businesses by extending loan repayment assistance and facilitating the restructuring of borrowing facilities. 

“Between June 1 and Dec 24, 2021, more than 2.7 million individual borrowers and over 95,000 small and medium enterprises (SMEs) had obtained repayment assistance. 

“Together with the government’s efforts to reinvigorate the economy, financing to SMEs remained steadfast, increasing 4.6% as at November 2021, and cumulative disbursements of loans during the first 11 months of 2021 was RM281 billion,” he said. 

BNM governor Tan Sri Nor Shamsiah Mohd Yunus said the pandemic has demonstrated finance’s power to address the country’s pressing problems. 

She said the financial sector will continue to have a central role in providing solutions to the challenges ahead — be it in bringing about an orderly transition to a greener economy or helping households and businesses become more resilient to financial shocks in an increasingly dynamic and fast changing economic environment. 

“We are committed to fostering conditions for greater market dynamism to respond to the changing needs of the economy and society. 

“This calls for more and diverse actors in the financial system, operating within well-defined parameters that encourage healthy competition and innovation, alongside prudent and responsible conduct,” she said in her welcoming remark. 

Expounding on BNM’s approach behind the blueprint, she said financial services must help people and businesses grow their wealth, engage in trade and commerce, and build resilience. 

“It must help customers manage financial risks and adverse events, including climate and environment related risks to secure lasting prosperity. 

“To this end, the blueprint seeks to align the financial sector with the national aspiration to not only become a high value-added and high-income economy, but also lay a solid foundation for a more dynamic, inclusive and sustainable development path,” she added.