Malaysia:Central bank issues 2023-2026 financial inclusion framework
According to Asia Insurance Review, Bank Negara Malaysia (BNM) has issued the 2nd Financial Inclusion Framework 2023-2026 which serves as a four-year strategic roadmap and principle-based guidance to advance financial inclusion in Malaysia.
The implementation of the 1st Financial Inclusion Framework (2011–2020) led to significant improvements in the accessibility and take-up of basic financial services in Malaysia. Despite the progress made, several barriers and challenges need to be addressed to run the last mile in progressing financial inclusion, says the central bank in a statement. An example is that 47% of Malaysians claim to have difficulty raising MYR1,000 ($214) as emergency funds.
The new Framework takes into consideration the alignment of strategies towards new emerging growth angles in financial services, and achievement of the United Nation’s Sustainable Development Goals (SDGs) and Environmental, Sustainability and Governance (ESG) propositions for higher value creation.
The Framework provides as well principle-based guidance on defining the financially unserved and underserved, with the aim of ensuring greater alignment of industry efforts with inclusive finance goals.
The Framework features:
- a more expansive and holistic approach to transition the focus from accessibility and usage to achieving broader development outcomes as well as financial resilience and well-being;
- policy objectives to address remaining gaps and accelerate the advancement of financial inclusion;
- strategic enablers to support the effective implementation of the Framework;
- principle-based guidance to identify the unserved and underserved – covering broader challenges of exclusion beyond geography, and includes various aspects of financial vulnerabilities; and
- two cross-cutting themes as underlying implementation principles: embedding gender equality considerations for greater socio-economic outcomes, and strengthening impact measurement and evaluation of financial inclusion efforts across the industry to promote greater accountability.
- list of key performance indicators (KPIs) that will account for the quality of financial services and components of financial capabilities and health (to be published in 2023 upon consultation with stakeholders).
BNM has consulted key stakeholders in developing the Framework. Constructive feedback and suggestions have been received during the consultation period and have been incorporated in the issuance of the Framework.
