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Hee Sung Kim
Digital Finance and Innovation
‘Their Financial Lives’ is a two-part research series designed to inspire providers, regulators and other financial market facilitators to design financial services that respond to the aspirations of low-to-moderate income (LMI) people and improve their financial health.
As an upper middle-income country, the financial inclusion trajectory has been impressive with the majority of Malaysia’s population holding a deposit account. However, the uptake and usage of financial products among the Malaysian mass, particularly among the low-to-moderate income people, in managing their financial lives is still fairly low. Case in point: Insurance and takaful penetration is at 17 percent, 20 percent of Malaysians did not save in the past six months (1) and 12 (2) percent of adults borrowed from a financial institution.
We interviewed 72 women and men across Kota Bharu, Kota Kinabalu and Kuala Lumpur to hear first- hand about their financial aspirations and how they spend, save and borrow money.
“I want to own a property (house), but property in Sabah is very expensive. This is something I am worried about. I am living in my wife’s family’s house, but I want to buy my own house,” shared an adult Bumiputera man living in Kota Kinabalu.
A young Chinese women in Kuala Lumpur shared her initial struggles to save, “I only started saving. I have been working for a few years. I barely had any savings for the first two years, as I did not have enough to get by. Now, with an increased salary, after two years, I can save.”
The research also shares examples of how start-ups in Malaysia are addressing some of those challenges head-on.
We hope readers will take cues from this research when they go to the drawing board and start designing their next big financial product.
This research is supported by the i3 Programme designed to innovate, implement, and impact positively on the financial health of low-to-moderate income people in Bangladesh, China, Malaysia and Vietnam.
The i3 Programme is funded by Metlife Foundation and implemented by UNCDF in Malaysia and China.
(1) Source: Malaysia National Strategy for Financial Literacy, 2019-2023
(2) Source: Global Findex 2017