WIDESPREAD public participation in national economic activities through the use of the financial system as an intermediary plays an important role in socioeconomic development, according to Bank Negara Malaysia deputy governor Adnan Zaylani Mohamad Zahid.

He said the use of financial products and services, including deposit accounts, hire purchase and business loans, and insurance, by individuals and businesses in the formal financial system enables the public to manage their finances wisely and plan for the future in a more sustainable and orderly manner.

“This obviously will reduce the risk of poverty and enhance individual and business resilience in dealing with unforeseen situations such as losing one’s source of income or business and other misfortunes,” he said in his speech at the closing ceremony of the Johor Financial Literacy Carnival today.

Adnan Zaylani said financial inclusion can bridge the socioeconomic divide, with all strata of society having equal opportunities to participate in economic development with no one being left out.

“Some 96% of Malaysian adults now have an active deposit account and 99% of sub-districts (mukim) in the country have access to financial services,” he noted.

However, he said that while financial inclusion in Malaysia in terms of savings account ownership is among the highest in this region, the country still faces challenges such as ensuring access to certain financial products and services for marginalised and underserved groups.

“With the rising cost of living post-pandemic, the groups are grappling with the issue of food security, income disparity and global economic uncertainty.

“To resolve this situation, a shift is required covering all aspects, especially opportunities for income generation, competitiveness, restructuring of subsidy strategies and policy, and spurring the economy through innovation and state-of-the-art technologies,” he said. – Bernama, October 29, 2023.