The COVID-19 pandemic has had a profound impact on Malaysia and our economy as it has around the world. Against this backdrop, we are encouraged by the tabling of the 2021 National Budget which demonstrates the Government’s commitment to providing adequate expansionary fiscal support to impacted businesses and services, especially amongst the micro-enterprises and SME (MSME) business community, while recovering and revitalising the economy with resilience to protect lives and livelihoods.
Boost’s priorities align with the stance proposed by the Government. Since the beginning of the Movement Control Order (MCO) period earlier this year, our priority agenda as an e-wallet provider and digital payment platform is to help impacted local businesses rebuild by working closely with the Government, industry players and regulators especially on coordinated digital initiatives. In playing our role, we worked quickly to improve the digital payments landscape as one way to support the digitisation process and bolster the recovery of MSMEs who make up 98.5% of businesses in Malaysia. MSMEs contribute a sizable close to 40% of the national GDP and make up 70% of the employment in the country. It is evident that the health of the local economy goes in tandem with how well the MSME segment thrives.
We welcome the Government’s proposed effort to encourage business digitalisation, especially among MSMEs via another round of the E-Commerce SME & Micro-SME Campaign and Shop Malaysia Online initiative which we first saw during the PENJANA economic recovery plan. The renewed programmes are expected to positively impact over 500,000 entrepreneurs and enterprises. These two intiatives equip and support enterprises with digital tools and strategies that will go a long way in setting up these businesses to become crisis-proof as we enter somewhat uncharted territory in a post-pandemic era.
During the concluded the MSME E-Commerce campaign and PENJANA Shop Malaysia Online initiative carried out in August and September in partnership with MDEC, we managed to successfully enable over 15,000 MSMEs’ to shift their businesses from offline to online. This shows that the Government’s digitisation initiatives are indeed successful with micro and small business owners keen to adopt new technologies.
We are further supporting this shift by extending the Government’s funding support under the SME Digitalisation Grant by MDEC, in partnership with Celcom who is an official Technology Solutions Provider (TSP) for the grant. We also commend the Government’s additional RM150 million allocation to the SME Digitalisation Grant and Automation Grant and relaxing the eligibility conditions to be more inclusive of micro-SMEs and start-ups in operation for at least six months.
Through these programmes, we hope to build a robust merchant ecosystem to digitally-enable MSMEs. It comprises cashless payment tools through our e-wallet platform as well as micro-financing and micro-insurance through our sister company Aspirasi. Through this ecosystem, MSMEs can easily build an online presence, foster customer loyalty, and reach a previously untapped customer base.
Our objective here is to simplify access to tools that enable MSMEs to adopt digital strategies as a means to cater to the rapidly growing digital- and mobile-first generation as well as strengthen their business continuity plans in this new normal. They also serve as a very important step to lower the barriers of entry in facilitating entrepreneurship. It can provide an avenue for the 90,000 Malaysians which Social Security Organisation (SOCSO) reported have suffered job losses and lower income communities with new opportunities of earning an income, which is key to rebuilding their livelihoods, subsequently, is crucial for revitalizing Malaysia’s economy.
The pandemic has also thrust the digital economy into the spotlight. Contactless and cashless payments such as e-wallets are rapidly emerging as essential and relevant solutions. They not only help businesses stay afloat and drive their business forward in these challenging times but also serves as a supplemental precaution to maintain social distancing and minimize contact risk as part of the new norm.
In this vein, we are encouraged by the introduction of the eBelia programme providing another RM50 e-wallet incentive to 1.5 million youth aged 18 to 20 years, further cultivating a cashless society. This is an important proposal from the Government as it will increase the stickiness of e-wallet use and adoption amongst young Malaysians.
Following the success of the e-Tunai Rakyat and ePENJANA initiatives, Boost charted a 55% increase in Gross Transaction Value (GTV) at end-September compared to the initial MCO period in April. The GTV levels also exceeded pre-MCO levels between January to March 2020. Our merchants in the micro-enterprise and smaller business segments have also seen consumer spending increase by 86% in October 2020 compared to April 2020, as more consumers embrace the digital and cashless lifestyle. This validates the ready acceptance and consumer behaviour shift of many Malaysians to port over to e-wallets.
The Government’s focus on expanding broadband coverage as part of the National Digital Network (JENDELA) and improving cyber security safety with an allocation of RM27 million to CyberSecurity Malaysia is poised to strengthen Malaysia’s digital connectivity further and create a safer infrastructure for e-commerce. This sets up a key building block ensuring digital inclusivity for all Malaysians to benefit from the digital economy.
As a homegrown brand built in Malaysia, by Malaysians for Malaysians, Boost remains committed to supporting Malaysian businesses and our users navigate the volatile days ahead with easing and speeding up the shift to digital services with the right digital solutions, tools and resources. The way forward will be challenging, however we believe that with our collective resolve and the Government’s initiatives underlined in the tabling of Budget 2021, we can support the nation’s aspirations towards a digital economy and steer Malaysia to brighter days ahead.
Commentary by Boost CEO Mohd Khairil Abdullah