DWINDLING business since the movement-control order and a sharp decline in turnover have pushed many money changers and remittance companies into the red, said Malaysian Association of Money Services Businesses (MAMSB) president Jajakhan Kader Gani.

“The money changing industry has been severely impacted by the MCO, due to the restrictions on travel – both in terms of foreign tourists visiting Malaysia and Malaysians travelling overseas, as well as Malaysians who were working in Singapore,” Jajakhan told The Malaysian Insight.

His remarks reflect Bank Negara Malaysia data which show that 147 companies licensed under the Money Services Business Act 2011 are no longer in operation as of October 30.

Border closures and movement restrictions have caused an almost 80% decline in revenue for the money changers, Jajakhan said.

Remittance businesses have also declined by 30% because of workers’ pay cuts, reduced working hours and business closures.

However, money changers and remittance firms still have to bear fixed costs despite the fall in earnings.

“While turnover has dropped, fixed costs like rental and salaries, are continuing, resulting in many of the companies reporting losses,” Jajakhan said.

Some companies are licensed to offer only remittance services, while others have a licence to offer both remittance and money changing.

To sustain themselves, Jajakhan said remittance companies are now looking into obtaining funding under the SME Penjana tourist fund (PTF) and MDEC automation digital fund to offer mobile remittance services.

MAMSB is also hoping that the government will support the industry through digitalisation grants and rental rebates.

The association has 338 members nationwide, of whom at least 300 are involved in both money changing and remittance.

According to Isaku Endo, senior financial sector specialist, World Bank Group, Malaysia, with its large population of foreign workers, emerged as the third largest remittance sender in the region in 2018, at US$10.8 billion (RM45.4 billion).

In 2017, there were 1.8 million foreign workers.

In 2016, the money changing industry recorded a turnover of RM73.5 billion. – November 28, 2020.