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Understanding Malaysia's FinTech Investment Landscape – Deep-Dive

Over the past few weeks, MEDICI has brought you a series of articles, exploring FinTech in the ASEAN region. These articles, each focused on a different ASEAN country, have provided comprehensive insights into the FinTech investment landscape in the region. MEDICI now brings you the concluding article in the series.

ASEAN in Figures

ASEAN (the Association of Southeast Asian Nations) is the third-largest region in Asia. It is home to more than 630 million people with one-fourth of the population living in urban areas. ASEAN has an annual growth rate of 4.7% and has $119.97 billion in FDIs; it is also one of the fastest-growing regions as well as the seventh-largest economy globally.

Its population is young, and educated with a literacy rate of over 80%, phone-savvy with more than 0.5 phones per person, and enjoys a low-to-mid unemployment rate of 0.5–6.9%. ASEAN members also have an average to a high life expectancy of 69–82.7 years, and a gender parity of 49.9% males to 50.1% females.

It has been interesting, so far, to explore and review ASEAN countries’ FinTech landscapes such as those of Thailand, Singapore, Vietnam, Indonesia, and the Philippines. Bringing the series on countries in this region to a conclusion is this fascinating look at Malaysia through the lens of FinTech investments in the country.

Malaysia in Figures

Malaysia has a population of 30.5 million inhabitants, with more than 74% of them living in urban areas, and no more than 1.7% living below the national poverty line. The country also has one of the highest phone and internet penetration rates with 1.44 phones per person and 71% respectively. The literacy rate is also quite high at 94%, and the unemployment rate is relatively low at 3.2%.

In terms of ease of doing business, the country is ranked 23rd worldwide, but foreign ownership is capped at 30%. Malaysia’s corporate tax rate is at 24% – and increases gradually if income is MYR 500K or less (starts at 19%).

Macroeconomic Overview

Following a decade of impressive +6% real GDP growth, the Malaysian economy reported a growth deceleration during 2015, mainly influenced by external factors including a drop in crude oil prices, weak global economy (particularly the slowdown in Chinese economy), slowing private consumption, and a threat of rate hike in the US.

In January 2016, Moody’s lowered Malaysia’s outlook to stable from positive, driven by (i) the deterioration in Malaysia’s growth and external credit metrics; (ii) the weakening ringgit; (iii) political tension & higher prices; and (iv) rising macro-financial risks posed by system-wide leverage. Analysts expect that the Malaysian economy will stabilize in late 2016 if the oil prices could rebound. ...

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