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It’s been oft-quoted that Malaysia intends to be a high-tech innovative nation by 2030. 

Tech startups in the country play a role in helping the nation achieve this goal, which brings up the entire economy as a whole.

As the pace of innovation picks up, it’s important that great ideas attract strong government backing, with good collaboration among industry players and investors. 

At the Wild Digital SEA 2022 conference, Patrick Grove, CEO of Catcha Gorup had Malaysia’s Minister of Finance, Tengku Zafrul in the hot seat to grill him on what local tech startups can expect to see in 2023.

1. Continued funding & development of the ecosystem for tech startups to grow

According to Patrick, the reality is that Malaysia’s tech startups aren’t short of talent, but the sector has been starved of government support for a while.

During Zafrul’s tenure, he’d set up PENJANA initiative in 2020 as part of Malaysia’s RM35 billion Economic Recovery Plan that covered a variety of funding schemes.

Part of the initiative introduced RM1.2 billion into the tech startup ecosystem. This funding was aimed at helping Malaysian startups be brave enough to take risks and grow their businesses to make Klang Valley the Silicon Valley of the SEA region.

Even startups that weren’t founded in Malaysia but have operations here were given a shot at this RM1.2 billion investment pool to help the country achieve its Silicon Valley goal.

Zafrul shared that the investment has been successful so far. Speaking to startup players, he learnt that startups want the government to continue [supporting] the sector, not directly, but by participating through agencies which know how to invest.

Beyond funding, he also intends to help the country grow the right ecosystem for startups to have access to other players, markets, strategic advice, and the like. 

“Because in the end they’re creating not just jobs, but innovations, technologies, etc. that are important because you need to look at new industries for the future of the country,” Zafrul stated.

2. More programmes to help Malaysians adopt digital solutions pertaining to finance

In the past two budgets’ tabling, Zafrul pointed out that the government was looking to accelerate the country’s tech adoption. 

“We have forecast that our digital industry by 2025 will make up 25% of our GDP, creating 500,000 jobs for the digital economy,” he predicted. 

It’s no surprise that the pandemic was a large catalyst in driving ecommerce along with online work and leisure activities. Various governmental programmes have also encouraged new and existing SMEs to adopt digitalised methods.

Image Credit: Tengku Zafrul’s Facebook

e-Pemula was a programme rolled out to present Malaysia’s youth with RM300 to enable them to spend with any e-wallet, from Grab and BigPay to Touch ‘n Go eWallet and Boost. 

The initiative was made available for offline and online purchases, which was a development from its predecessor, e-Belia, which was solely online.

These are examples of the government encouraging digitalisation in the country, an effort which Zafrul reassured would continue.

3. Working with startups & SMEs to create more carefully targeted subsidies

Catcha Group’s CEO noted that one interesting effort Zafrul conducted as Minister of Finance was releasing an RM77 billion subsidy programme across the country. 

To put that into perspective, RM77 billion is about RM2,549 per Malaysian citizen, at the time of writing. 

Zafrul explained that the government rolled out this large subsidy to help the citizens with inflation, which he noted Malaysia had one of the lowest rates of in the region and the world. 

“For the first seven months [of 2022], our inflation rate is around 2.8%, in July it was 4.4%. This was partly due to the subsidies,” Zafrul calculated. Though, he also addressed that providing subsidies in such large amounts to the masses isn’t sustainable in the long term.

“In fact, a study from the central bank has shown that out of the petrol subsidy, the T20 population gets close to 50% of that subsidy,” Zafrul emphasised.

For example, petrol subsidies are RM30 billion, and RM15 billion went to the T20s who could actually afford petrol. Whereas the other RM15 billion went to M40s and B40s. 

“In fact, you could actually save the money from the former population because those funds can go into building schools, hospitals, roads, etc. with that number. More importantly, there needs to be a fiscally sustainable policy going forward.”

Here’s where startups come in. The government intends to collaborate with more SMEs and startups to develop a targeted subsidy mechanism to aid those who actually need it for a longer term.

4. Digital banking to go into full swing

Now that Bank Negara Malaysia (BNM) has issued its five digital banking licences in Q2 2022, Zafrul is confident that they will all be in full swing by 2023.

These digital banks will first be making banking more inclusive, helping the unserved and underserved markets in Malaysia. 

Zafrul himself has been able to instigate digital banking in the Philippines during his time leading CIMB Group before he was involved in public service. Patrick highlighted that this was a time even before Singapore or Malaysia rolled out their own digital banking frameworks.

Image Credit: CIMB Group

Today, Zafrul reported that the digital banking efforts in the Philippines have surpassed five million customers, for an effort that was started from scratch by the bank.

It’s clear that even the e-wallets in the country have already been serving these markets, enabling everyone to make digital payments and banking easier and more accessible.

Patrick also touched on Zafrul’s view on the Web3 and NFT space, where the finance minister hinted that BNM, along with certain banks is looking into producing their own digital currency as well.


Towards the end of the interview, Partick asked Zafrul to point out areas in the banking industry where young and nimble entrepreneurs have opportunities to disrupt.

“For up-and-coming entrepreneurs, you have two options: work with the incumbents and see where they can improve their processes—especially the customer experience part that comes with many issues, or you could do your own thing,” Zafrul shared his two cents.

Elaborating, he said that he’s seen entrepreneurs working with incumbents offering the right solutions to provide an improved customer experience.

Banks have a tough framework to work within, making it hard to change the way they do things, leaving certain obstacles unaddressed, such as the customer experience.

“This is where digital banks and new startups can come up and fix because they don’t have the frameworks or legacy issues that traditional banks have,” highlighted Zafrul. 

On the other end, if entrepreneurs decide to start their own fintech solution, there are also opportunities in this area. 

Citing a startup he came across in Penang, Zafrul highlighted that its founder was once an engineer working in a major MNC. This ex-engineer then founded a startup that aimed to solve an inefficiency they noted in the respective industry.

“The avenue and opportunity are there for anyone to take advantage of the inefficiencies they see in other sectors of the economy,” encouraged Zafrul.

  • Learn more about Wild Digital here.
  • Read more articles about Wild Digital SEA here.

Featured Image Credit: Vulcan Post

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Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)