SMEs to maintain double-digit growth
AMMB Holdings Bhd (AmBank) expects the SME segment to continue its strong double-digit growth this year underpinned by the cut in the Overnight Policy Rate (OPR).
Group chief executive officer Datuk Sulaiman Mohd Tahir said the bank saw the move by Bank Negara Malaysia (BNM) as positive.
“With the cut in interest rate, it’s cheaper for people to make repayment on loans and there’s also less burden for the businessess out there.
“Last year SME (financing) growth was 14.3%. This year, we forsee it posting double-digit as well,” he said.
AmBank reduced its base rate and base lending rate by 20 basis points (bps) to 3.8% and 6.65% respectively following BNM’s decision to cut the OPR by 25 bps.
Sulaiman said the cut in OPR by BNM would balance out the negative effects in the global financial world versus Malaysia.
One of the reasons for the cut is to support businesses out there. But whether 25 bps would be sufficient to do this remained to be seen, he said.
Sulaiman said the demand for SME financing was still there and the bank will continue to focus on the segment.
Regulatory framework for fintech in 4Q
The regulatory framework to enable the adoption of financial technology (fintech), which is expected to be released by the final quarter of this year, will create an environment for financial innovation to prosper.
Bank Negara Malaysia Governor Datuk Muhammad Ibrahim said the central bank had established a financial technology enabler group to formulate and enhance the regulatory framework to facilitate the adoption of technological innovation in the Malaysian financial services industry.
He said bank Negara would come out with a consultative paper on fintech this month, seeking industry comments and feedback on the said framework to ensure its effectiveness when finalised.
He said the central bank would keep an open mind and look at best practices adopted overseas as well as in the country.
“The various initiatives we have made on payment systems over the years are good examples of fintech,” he said.
Muhammad stressed that technology, which fostered strategic alliances among banks, entrepreneurs and service providers such as telecommunications companies, was the way of the future.
Effective cybersecurity and implementation of security safeguards were pre-requisites in capturing the digital value of financial services in Malaysia. Muhammad added that there was a need to advocate long-term benefits of implementing enhanced security features.
Drivers take Uber to UK tribunal
Two drivers took Uber to a British employment tribunal on Tuesday, arguing that the ride service is acting unlawfully by not offering rights such as holiday and sick pay, in a test case that could force the app to change its business model.
Uber, which allows users to book and pay for a taxi by smartphone, says its more than 30,000 London drivers enjoy the flexibility of being able to work when they choose and receive on average more than the minimum wage.
The firm, whose investors include Goldman Sachs and Alphabet Inc unit Google, has grown rapidly around the world and is valued at US$62.5bi but has faced protests, bans and restrictions in a number of cities.
Last month, Uber agreed to pay US$7.5mil to settle a lawsuit brought by drivers over background checks at the Federal Court in San Francisco, where the app is based. In London, it has fended off attempts by drivers of the city’s famous black cabs to have the app ruled illegal, and transport bosses decided earlier this year not to impose tough new rules on the app.
But a ruling in favour of the two drivers could lead to dozens more coming forward and affect the firm’s reliance on the self-employed.
“This claim is vital for the thousands of Uber drivers who work in England and Wales and has implications even wider than that,” Annie Powell, employment lawyer at firm Leigh Day said.
“We are seeing a creeping erosion of employment rights as companies misclassify their workers as self-employed so as to avoid paying them holiday pay and the national minimum wage,” she said.
The tribunal is expected to last until the start of next week but the judge is unlikely to deliver a decision until several weeks later.