Origin of Fintech
FinTech started by WeChatPay and followed by AliPay in China many years ago. Both are eWallets where customers have to deposit money into their account or their credit card or direct debit card are linked to it. There was no cause for alarm.
A year or two ago, eWallets were introduced by GrabPay and Touch n Go in Malaysia, there were no problems as most if not all customers spent within their means. It operated like the internationally known PayPal where the account is linked to the bank account or credit card.
The emergence of Digital Microloan that is of concern to the nation!
We all support the government to make life easier for the Rakyat especially the B40s so that they will be easily accessible for loans through financial schemes such Digital Microloans to help them. However, at this juncture there are no laws in place to govern Digital Microloans to protect the vulnerable B40s of which consist mainly of students and low income households.
It must be noted that out of a sudden in January 2021 the Governor of Bank Negara Malaysia (BNM) (Malaysia Central Bank), Tan Sri Nor Shamsiah Bte Mohd Yunus, had announced that BNM had opened invitations for companies to apply for Digital Banking Licence from January 2021 and closing date was 30 June 2021. This Digital Banking Licence issue went quiet until early this year. Suddenly BNM had said that it will award this licence to the “SELECTED FIVE” companies. Presumably the licence is to cover the public offer of Digital Microloans!
On 30 March 2022 BNM Governor announced that “upon completion of the legal process” BNM will only announce BNM’s decision which are the “SELECTED FIVE” companies have been awarded with the said licence, HERE.
No Law To Govern Digital Microloans
It was on 30 March 2022, BNM had uploaded its Annual Report online, wherein it had admitted that it has just started to discuss with the Security Commission (SC) and Ministry of Finance (MoF) to come with up with a new Consumer Credit legislation. Whilst they are discussing about the said new legislation, several Digital Microloan companies have already launched their products as though they had already obtained the Digital Banking Licence from BNM and received “green light” to do so. Perhaps someone higher up had whispered to the “friendly” parties that BNM had already granted the said licence to their respective companies! It is a case of “Malaysia Boleh” system!
It seems that the Digital Microloan companies have already been allowed to dish out loans two to three times the B40’s monthly salary.
The Unelected Minister of Finance, Tengku Zafrul Was Encouraging Members Of The Public: Don’t ask. GOpinjam.” Most Irresponsible!
It is scary! At this rate, perhaps “nasi sudah menjadi bubur” by the time our most proactive unelected Finance Minister, Senator Tengku Zafrul, is ready to read this Consumer Credit Bill in Parliament for approval!
BNM, SC and the unelected Senator are taking this Digital Microloan very lightly! Our nation is doomed for disaster in a matter of a few years and when the Digital Microloan bubble burst then we will witness many B40s will be in misery. Digital Microloan operators and bank will also go bust! To take whatever remedy actions then will be futile as it will be a case of “closing the stable door after the horse has bolted”!
It seems that under the watch of the best unelected Zafrul, Malaysians are suddenly being encouraged to participate in the Digital Microloans under the pretext of helping B40s. The latest motto of Zafrul was: “Don’t ask any question. Just borrow”! It would appear that this unelected minister has been on a launching and promotion spree of the Digital Microloans for companies without putting the relevant laws in place to protect the Rakyat from being exploited. This was most irresponsible to say the least. Then what do you expect from an IRRESPONSIBLE “Tongkat Assisted” Minister!
Mushrooming of Fintech / Digital Microloan Products
Out of the blue, we saw the mushrooming of FinTech asuch “Buy Now Pay Later Schemes” (BNPL), eWallets, Digital Microloans and the like in Malaysia.
BNM must be forewarned that such FinTech / Digital Microloans is very attractive to the majority of the ordinary Rakyat namely the B40s group. Such schemes are easily accessible to B40s whereas normal loans are usually out of reach for them in the conventional financial institutions due to stringent rules and procedures.
The operators of FinTech / Digital Microloan are in fact identical to banks in a smaller scale but without strict laws to control them at this moment. In short, FinTech / Microloan operators more concern with volume of borrowers and 100% profit driven. Of course, that is to say to help the rakyat! This is a dangerous trend! It seems that our most ambitious unelected Finance Minister is walking a fine line between ingenuity and impulse here but with his so-called brilliance, it is assured that Malaysia will be doomed with disasters in a few years’ time if this situation is allowed to go without the consumer credit legislation in place.
To be continued.
Next Change for Part 2 – Stay Tuned!