Ac­tivist banks can help us man­age our fi­nances

New Straits Times - - LETTERS - DR IRWAN SHAH ZAINAL ABIDIN

Pakatan Hara­pan (PH) re­cently marked its 100th day in govern­ment, pun­dits made as­sess­ments on its per­for­mance and what to ex­pect in the fu­ture.

Hon­estly, 100 days is too short a pe­riod to eval­u­ate any new govern­ment.

It is even more so in the con­text of Malaysia, where Barisan Na­sional had been in power for 61 years.

The fact that the tran­si­tion of power was peace­ful, and that the new govern­ment is adamant in com­bat­ing cor­rup­tion, abol­ish­ing the Goods and Ser­vices Tax, ad­dress­ing the coun­try’s debt, and im­ple­ment­ing in­sti­tu­tional re­forms, is a big leap for­ward.

There is a need for the govern­ment to fo­cus on the main is­sue that united Malaysians to re­ject the pre­vi­ous govern­ment, which is the rise in cost of liv­ing.

The an­nounce­ment by Prime Min­is­ter Tun Dr Ma­hathir Mo­hamad that 1Malaysia Peo­ple’s Aid (BR1M) would be phased out caught peo­ple’s at­ten­tion.

Is this the right move? I’ve al­ways be­lieved that BR1M should act only as a short-term mea­sure.

Yes, in other coun­tries, the un­con­di­tional di­rect cash trans­fer mech­a­nism has helped the poor, but it is im­por­tant to high­light that BR1M is not meant to ad­dress poverty.

Rather, it is to ease the bur­den caused by the rising cost of liv­ing. It was in­tro­duced in 2012, but peo­ple are still com­plain­ing about the rising cost of liv­ing.

It ap­pears that BR1M needs a re­think.

The an­nounce­ment by Eco­nomic Af­fairs Min­is­ter Datuk Seri Azmin Ali that the govern­ment will soon an­nounce a new strat­egy, es­pe­cially to ad­dress the needs of the Bot­tom 40 group, is timely.

He hinted that this new strat­egy would fo­cus on em­pow­er­ing the peo­ple.

One way to do this is to en­cour­age peo­ple to be en­trepreneurs.

The govern­ment must cre­ate the right ecosys­tem to make peo­ple in­de­pen­dent fi­nan­cially.

It is time for Malaysia to re­think the role of banks. The govern­ment must help cre­ate ac­tivist banks.

What is an ac­tivist bank? A fi­nan­cial in­sti­tu­tion such as a bank be­comes an ac­tivist en­tity when it goes be­yond pro­mot­ing to di­rect­ing an eco­nomic ac­tiv­ity.

Ac­tivist banks do not just lend money. They look for prof­itable op­por­tu­ni­ties in the mar­ket for their po­ten­tial clients.

They also foster en­trepreneur­ship to en­sure the well­be­ing of busi­ness­men and their busi­nesses. Ger­man banks did this dur­ing the global fi­nan­cial cri­sis of 2008.

There is no rea­son why Malaysian banks can’t do this too.

The time has come for a new eco­nomic strat­egy to be ini­ti­ated so that peo­ple can man­age their own fi­nan­cial well­be­ing, come high or low cost of liv­ing.

An ac­tivist bank­ing sys­tem can be a good start.

Di­rec­tor, Asian Re­search In­sti­tute of Bank­ing and Fi­nance, Univer­siti Utara Malaysia

FILE PIC

We need to cre­ate more B40 en­trepreneurs so that they can be fi­nan­cially in­de­pen­dent.

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