KUALA LUMPUR: Malaysia is the 20th most financially inclusive market out of 42 markets, according to the inaugural 2022 Global Financial Inclusion Index from Principal Financial Group.
Besides that, Malaysia ranks fifth for financial inclusion support provided to employees by their employers.
According to Principal, the country's financial system receives high scores for enabling business confidence, and its government's support ranks in the top 10 for laws and regulations prioritising consumer financial protection.
Within the report, Principal proposes that Malaysia's high scores in several indicators suggest it is poised to experience an acceleration in its development as a capital and wealth market, resulting in rapid economic opportunity and greater output of wealth creation for its population and international participants.
Principal Malaysia country head and chief executive officer Munirah Kharuddin said Malaysia had made significant steps over the past decade to accelerate financial inclusion for its population.
"The country's federal statutory body that manages the compulsory savings plan and retirement planning for private sector workers in Malaysia, for example, has one of the most competitive mandatory retirement savings rates in the world," she said in a statement today.
In addition, Munirah said Malaysian banks are well capitalised, which has increased their ability to finance and loan to small businesses.
"Equally, as a wealthy middle class grows, there's been a push to create a retail investment culture by reducing state-owned stakes in government-linked companies and encouraging stock purchases across the population that encourages intelligent risk-taking," she said.
The Global Financial Inclusion Index is built around three pillars – government support, financial system support, and employer support.
It examines the extent to which each of these pillars provides the relevant tools, services, and guidance to enable their populations to achieve greater levels of financial inclusivity.
The Index was conducted in partnership with the Centre for Economics and Business Research (Cebr).
The methodology combines various data sources into one unified measure of financial inclusion at the market level.