may-june. 2020 | @Halal
2017, it contributed RM85.8 billion, which
translates to 6.3 per cent of the entire digital
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
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
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
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
provides a unique
advantage for Malaysia
to lead the regional
and global Islamic
This possibility is
heightened with the
expected growth of
the global Islamic
economy to US$3.0
trillion by 2021.”
– Datuk Dr Rais
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
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