PETALING JAYA: The lockdowns caused by the Covid-19 pandemic has resulted in more small and medium-sized enterprises (SMEs) adopting digitalisation and cashless payment solutions, according to Boost CEO Mohd Khairil Abdullah.
Since January, the user base of Boost, Malaysia’s homegrown e-wallet app, had grown by 75% while its merchants, especially SMEs, had jumped over 60%.
“Consumer spending with micro SMEs on our platform has grown 85% since the start of the movement control order (MCO) in March, ” said Mohd Khairil during the “Digitalisation of traditional businesses – what the future holds and the potential pitfalls” online discussion.
Other panelists in the online discussion were Malaysia Digital Economy Corp (MDEC) chief operating officer Datuk Ng Wan Peng and SME Association of Malaysia national vice-president CS Chin.
Mohd Khairil said the lockdowns had accelerated the growth of cashless payment solutions as businesses realised adopting some form of digitalisation was crucial to their survival.
“The lockdowns have forced a lot of re-thinking among SMEs. If you look at all our online related payments this year, they have grown by 2.2 times in the three months since the start of the MCO, ” he said.
Mohd Khairil also cited a famous case study using M-Pesa, a mobile phone-based money transfer, payments and micro-financing service, launched by Safaricom Ltd and Vodafone Group in 2007.
“I remember Christopher Tiffin (former Boost CEO and chief financial officer of Safaricom) telling us that among the reasons for the explosive growth of M-Pesa was the Ebola virus outbreak. It made it very necessary for people to move to cashless transactions, ” he said.
Ng said most traditional SMEs found it difficult to understand how they can become digitally-empowered.
She also noted that many SMEs don’t have the right digital skill sets in their workforces.
“For many small Malaysian businesses, they need us to go out to them and talk to them, and then handhold them. We had to run a lot of training classes; and have accelerators (outcome-driven programmes) to help them embark on the digitalisation journey, ” said Ng.
The government is providing matching grants to SMEs for them to digitise their businesses.
Bank Simpanan Nasional (BSN) in co-operation with SME Bank and MDEC will channel RM500mil of matching grants over a five-year period, which will benefit 100,000 SMEs.
The government will fund the eligible companies 50% of the cost of digital services they subscribe to or up to RM5,000 for the first 100,000 SMEs every year.
In July, MDEC also introduced the #SMART Automation Grant (SAG) to expand support for SMEs to make the digital leap.
The SAG is available for 50% of the total project cost or up to a maximum grant cap of RM200,000, whichever is lower.
However, Chin said the take-up rate for the matching digitalisation grants was low, partly due to low awareness and a pessimistic mindset among SME owners.
“There is an attitude issue – I would never get a grant, it is difficult to apply, etc. This is not wholly untrue. The application process can be tedious – you have to go to the bank during the MCO, and endure the long queues, ” he said.
Ng said MDEC understood it needed to reach out to more people, and has undertaken programmes such as eUsahawan to empower youths and micro SMEs.
“We provide training, and also mentoring services. And then, they themselves become a community and support each other. We have now consolidated all our e-commerce initiatives under a platform called Go-eCommerce where training materials and a list of partners are available.”