Activist banks can help us manage our finances
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
We need to create more B40 entrepreneurs so that they can be financially independent.