@Halal May/Jun 2020 - Page 11

may-june. 2020 | @Halal Cover Story 11 2017, it contributed RM85.8 billion, which translates to 6.3 per cent of the entire digital economy. E-commerce recorded a 14.3 per cent yearon-year (y-o-y) growth from 2016 to 2017. From the figures, e-commerce is a crucial driver of the digital economy. With Covid-19 disrupting the supply chain as well as affecting consumer behaviour and habits, e-commerce is not only set to grow further but serve as catalyst and impetus for the digitalisation of SMEs. MDEC is expecting a 20 per cent growth in e-commerce contribution to the digital economy this year despite the MCO. The anticipated contribution to GDP could go up to as high as RM170 billion for 2020. We forecast the projected growth could be achieved through the active intervention of various ecosystem partners via ongoing initiatives. How can the RM500 million SME Technology Transformation Fund and RM100 million Smart Automation Grant initiatives be streamlined to assist SMEs? The concern now is the low take-up of the Fund and Grant. I don’t see bureaucracy as an issue here. Let me give you an example. On paper, the SME Digitalisation Matching Grants worth RM500 million over five years will benefit 100,000 SMEs. But we are working hard with relevant agencies to identify ways to track and measure in making sure the over 907,065 SMEs in Malaysia benefit from these incentives. What matters is what I put down as the 3Es - education, exposure and engineering. They are inter-related. SMEs need to be educated, exposed and have their business models engineered to be digitalised. All three require sustainable and robust support from agencies like MDEC. MDEC’s SME digitalisation initiatives have to date onboard 230 Technology Solution Providers (TSP) with 595 digital and technology solutions to support over 200 SMEs. Meanwhile, under MDEC’s 100 Go Digital programme, we have engaged more than 100,000 SMEs nationwide with the support of 12 industry partners. Islamic finance and the digital economy are key economic growth areas. How will MDEC help drive this growth? The Shared Prosperity Vision (SPV) 2030 has identified Islamic finance and digital economy as Key Economic Growth Activities (KEGA). If I may quote from MDEC Islamic Fintech Report 2020: “This is a strategic move leveraging on Malaysia’s wellestablished global leadership in Islamic finance. It can be said to be a culmination of decades-long strong top-down approach and clear vision while taking advantage of the digital revolution in recognition of the transformative value the digital economy could play in the country’s overall economic growth”. (Note: please see sidebar). How do you rate Malaysia’s Fintech ecosystem compared to other countries? Malaysia is not an economy to be jealous of since its annual growth has averaged under five per cent for over the past five years. But the fintech adoption in the country and the interest from the local government to pursue this profitable industry might be a game-changer for Malaysia. With a population of 32.6 million and Internet penetration at a whopping 86 per cent, the country is ranked 1st in Southeast Asia when it comes to mobile penetration. This is not surprising. The potential for innovation within fintech enhances financial services like cross-border remittance, fund management, insurance or captive With over 2 billion Muslims around the world, an influential Islamic digital economy provides a unique and competitive advantage for Malaysia to lead the regional and global Islamic digital marketplace. This possibility is heightened with the expected growth of the global Islamic economy to US$3.0 trillion by 2021.” – Datuk Dr Rais Hussin Mohamed Ariff insurance as well as forex and online payment processing, making it easier and faster to perform many financial tasks. As of 2019, there are 196 key fintech players in Malaysia, and according to the Fintech Malaysia Report 2019, 38 per cent of them are in e-wallet and digital payment. Despite being new in Malaysia, the growth rate of fintech is phenomenal and is rapidly becoming a central part of the country’s financial sector, with considerable promise for expansion. How can Malaysia, as a global leader in Islamic Finance, drive the Islamic digital economy and what is the role of MDEC in this regard? With over 2 billion Muslims around the world, an influential Islamic digital economy provides a unique and competitive advantage for Malaysia to lead the regional and global Islamic digital marketplace. This possibility is heightened with the expected growth of the global Islamic economy to US$3.0 trillion by 2021. With most services in the B2C space, addressing Muslim consumer needs and pain points