Fintech players welcome Malaysia’s new online lending guidelines

The Department of Housing and Local Government unveiled a new guideline last week that will allow approved lenders to provide loans digitally. Zuraida Kamaruddin, Minister of Housing and Local Government, said the new guidelines were issued with microentrepreneurs in mind, who are generally unable to obtain loans from banks.

Eight operators got the first batch of approval to provide loans online, including; Axiata Digital Capital Sdn Bhd, BigPay Later, Grabfin Operations (M) Sdn Bhd, GHL Payments Sdn Bhd, Presto Credit Sdn Bhd, JCL Credit Leasing Sdn Bhd, Fortune Tree Capital Sdn Bhd and Hoop Fintech Sdn Bhd.

Minister Zuraida Kamaruddin predicts that with the approval of these 8 players, more approved lenders will come forward to seek approval to do the same. According to the minister, there are currently 4,572 approved lenders in Malaysia, most of them coming from Sabah with around 1,600 operators, followed by Selangor with 893.

Danny Leong, CEO of GHL Berhad Group, explained that the new directive allows companies like his to fully digitize the process, compared to the previous directive which required borrowers to physically show up to sign the loan agreement on the premises. lender’s records, with CCTV record and face-to-face meeting with an attorney.

Khairil Abdullah, CEO of Axiata Digital adds that digital lenders can now use technologies such as electronic signatures to provide access to finance to underserved markets, he added that the current licensing regime remains the same in that the Approved digital lender must offer the same protection. rights of borrowers, such as interest rate caps, under applicable law.

They both agree that the decision to introduce this new directive will significantly speed up the market’s ability to meet the lending needs of underserved people. Khairil believes this will have a dual effect, by making approved lenders more accessible, he predicts that the demand for illegal and exorbitant loans will also decrease.

Commenting on how this will affect Axiata Digital’s lending business, Khairil said

“This is a very welcome development and a forward-looking initiative on the part of the ministry which will allow Aspirasi to expand its service offerings under its existing license.

Mohd Khairil Abdallah

Mohd Khairil Abdallah

As we are a digital company, this allows us to unlock the value of our lenders license that we have held since 2019. In addition to our existing products, Aspirasi customers will now have the option to borrow under the regulated scheme. offered by law on lenders. 1951 and the new directive.

At Aspirasi, helping underserved MSMEs achieve their business goals is at the heart of our business. We believe that with the right support and embracing technology, they can make financial advancements personally, professionally and in the service of others, and become a part of the digital economy.

Danny leong

Danny leong

Likewise, Danny Leong commented,

“This would help GHL develop its microcredit business much faster and at lower cost. This cost reduction could then be passed on to borrowers through lower interest rates as well as smaller loan amounts, thus serving the SME, MSME and B40 segments.

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David A. Albanese