Malaysia is the 20th most financially inclusive market out of the 42 analysed globally, according to the inaugural 2022 Global Financial Inclusion Index (Index) from Principal Financial Group.
Principal Malaysia country head and CEO Munirah Khairuddin said Malaysia made significant steps over the past decade to accelerate financial inclusion for its population.
“The country’s federal statutory body that manages the compulsory savings plan and retirement planning for private sector workers, for example, has one of the most competitive mandatory retirement savings rates in the world,” she said in a statement today.
Additionally, she said Malaysian banks were well capitalised, increasing their ability to finance and loan to small businesses.
“Equally, as a wealthy middle class grows, there’s been a push to create a retail investment culture by reducing state-owned stakes in government-linked companies and encouraging stock purchases across the population that encourages intelligent risk-taking,” she said.
According to Principal, Malaysia ranks fifth for financial inclusion support provided to employees by their employers.
Within the report, Principal proposed that Malaysia’s high scores in a number of indicators analysed suggested it was poised to experience an acceleration in its development as a capital and wealth market, resulting in rapid economic opportunity and greater output of wealth creation for its population and international participants.
The Global Financial Inclusion Index is built around three pillars – government support, financial system support, and employer support.
It examines the extent to which each of these pillars provides the relevant tools, services, and guidance to enable their populations to achieve greater levels of financial inclusivity.
The index was conducted in partnership with the Centre for Economics and Business Research.