Microfinance in Malaysia benefits over 1 million enterprises

KUALA LUMPUR, April 20 -- Deputy Governor of Bank Negara Malaysia Shaik Abdul Rasheed Abdul Ghaffour delivering his keynote address during the Business Ethics Conference 2017 at Sasana Kijang today. --fotoBERNAMA (2017) COPYRIGHT RESERVED

KUALA LUMPUR: Malaysia’s microfinance landscape, which has evolved from being government-driven into one with vibrant private sector participation, has benefited more than one million micro enterprises in the country, said Bank Negara Malaysia (BNM).

BNM deputy governor Abdul Rasheed Ghaffour said at the turn of the century, the sector’s total outstanding financing stood at US$35mil (RM151mil), and had multiplied by more than 30 times to US$1.2bil (RM5.2bil) in 2016.

“Despite having made significant strides since the 1970s to develop a more inclusive financial system, our work in microfinance is still far from complete.

“Its full potential will not be realised until we observe direct linkages to welfare improvement in the micro segment, and ultimately, its sustainable growth,” he said in his speech at the 2017 Global Symposium on Microfinance in Kuala Lumpur on Monday.

Abdul Rasheed said microfinancing had enabled to improve the previously excluded segment of the society to create their own incomes, build assets and ultimately improve their standard of living.

“With poverty eradication taking centre stage in the global public policy agenda, as outlined in the United Nations Millennium Development Goals, the development of microfinance is certainly the most powerful, and it is an important part of Malaysia’s development agenda,” he said.

In 2016, BNM had introduced a comprehensive microfinance framework to promote the development of a sustainable microfinance industry in Malaysia.

“This would give micro entrepreneurs greater access to financing, especially for those with no collateral, supported by simple application procedures, minimal documentation and quick turnaround times,” said Abdul Rasheed.

He said that microfinance was also evolving in the era of unprecedented technological change, adding that adaptability was key for its growth. -  Bernama