Malaysia can hit target of 400 e-payment transactions per head each year before 2026: PM Anwar
Newly launched digital bank Boost aims to be profitable within three to five years
[KUALA LUMPUR] Malaysia aims for each member of its population to carry out 400 e-payment transactions a year by 2026, but Prime Minister Anwar Ibrahim thinks that the goal can be reached sooner, given the entry of more digital banks into the market.
“The target is not that high, but I anticipate it can be achieved earlier, with the efforts of digital banks,” he said on Thursday (Jun 6) at the launch of Boost Bank, Malaysia’s third digital lender and the first one touted as being fully home-grown.
“I call upon key players in the industry, such as Axiata and RHB, to intensify their efforts in promoting the advantages of Boost Bank, and expanding its benefits to all segments of society,” he added.
The bank, the holder of one of five digital-bank licences, is a 60:40 joint venture between Boost Holdings and Malaysia’s fourth-largest bank, RHB. Axiata, one of the five largest telcos in South-east Asia, holds a 78 per cent stake in Boost Holdings, with Great Eastern Digital holding the remainder.
To date, Boost Bank has nearly 11 million users and more than 630,000 merchant touchpoints across the country.
The other two digital banks already operational in the country are Singapore’s Grab-led GXBank and Japanese retail giant Aeon Group’s Aeon Bank.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
At the launch event on Thursday, Boost Bank announced its intention to be profitable within three to five years. Its chief executive officer Fozia Amanulla said that the bank will home in on the unbanked and the underbanked in the country, including in East Malaysia.
Plans have been lined up for new offerings for small and medium-sized enterprises (SMEs) and microenterprises, including offering financing products to such smaller businesses.
In Malaysia, microenterprises are companies with under RM300,000 (S$86,086) in sales turnover or fewer than five full-time employees.
Small enterprises are those with sales between RM300,000 and RM15 million, or between five and 75 staff; medium-sized enterprises have sales turnover between RM15 million and RM50 million, or between 75 and 200 full-time employees.
Fozia noted that Boost has offered RM4.4 million in microfinancing to SMEs as working capital through its e-wallet platform.
“There is growing demand for financing products from SMEs in the country, as these companies expand their business. We are looking at tapping into this segment,” she added.
Data from the Department of Statistics Malaysia shows that there are 1.15 million SMEs in the country; around 900,000 of them are microenterprises. These businesses contributed around 38 per cent of the country’s gross domestic product.
Two other successful applicants for digital-bank licences, which have yet to launch their banks, are a consortium led by Singapore-based Sea Ltd and YTL Digital Capital, and a consortium led by Malaysia’s KAF Investment Bank.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
