A holistic blueprint
BNM’s Financial Sector Blueprint 2022-2026 is all-encompassing with five strategic thrusts that aim to broaden financial offerings to all, while supporting the country’s high-income nation aspirations, promoting digitalization of the industry and promulgating sustainable/Islamic financing. We maintain a POSITIVE on the sector.
Desired targets and outcomes by 2026
BNM’s desired targets and outcomes by 2026 include a) increased digital offerings for customers with e-payment per capita increasing at a CAGR of >15%, b) strengthened financial safety nets particularly through increased insurance penetration rates of 4.8-5% of GDP, c) significant growth in alternative finance, d) deeper global integration across borders and Malaysia maintaining its global leadership in Islamic finance; and e) steady growth in green financing to more than 50% of new financing.
Five strategic thrusts for 2022-2026
BNM’s five strategic thrusts for 2022-2026 are to a) fund Malaysia’s economic transformation, b) elevate the financial well-being of households and businesses, c) advance digitalization of the financial sector, d) position the financial system to facilitate an orderly transition to a greener economy and e) advance value-based finance through Islamic finance leadership.
Promoting finance for all
Access to financing for all is an over-arching theme, in our view, be it to unserved or under-served consumers/SMEs. Measures include, among others, a) expanding the capacity of guarantee providers, b) strengthening the role of Development Financial Institutions (DFIs) to bridge financing gap (which includes a consolidation of the industry), c) facilitating “second chances” for non-viable borrowers eg by simplifying the insolvency regime for SMEs or removing existing foreign equity limit requirement for buyers of impaired assets, d) extending financing options to the under-served through digital banks and/or e) reinforcing the finance ecosystem for microenterprises.