Digital Transformation is the way to survive

We applaud initiatives and programs introduced by the Government’s Penjana SME Financing Scheme in ensuring that the most vulnerable amongst the Rakyat are being taken care of to ease their difficulties during this troubling period. FAOM represents the Financial Technology (Fintech) companies in Malaysia and many of us are innovative start-ups and SMEs that focus on value creation for the unserved and underserved segment of the society. In comparison, we are the B40 of the business community as we are new, not well understood and often, inadvertently slip through the cracks of the conventional process by various government agencies and private institutions.


What We Do and Why it Matters

Based on our survey, there are over 1000 Fintech companies and thus far, FAOM managed to register almost 200 of them since our inception in 2016. As a representative of a new segment that strives to bridge gaps of the underserved and underserved of the society, Fintech companies is one of the significant new growth engines for Malaysia digital economy for the future. Our focus is to bring multiple values to customers and key stakeholders, including the government agencies, GLCs and GLICs to embrace ‘a collective eco-system’ via digitalize business model and mindset. Fintech is not just a business tool, it is a key enabler for transparency, cost-effectiveness, efficiency and digital platform for multistakeholder’s collaboration beyond business.

Why is it Vital to Help Fintech Start-ups and SMEs

First, the companies that we represent are the ‘B40’ of the business world. They are new, small and operated by the founders/owners. Without the government’s help, they will not survive and Malaysia will lose the opportunity to build a solid foundation for our digital economy growth engine, post-MCO and Covid-19 pandemic.   Second, these companies also hired many young, bright talents and facilitate reskilling of experienced talents who are passionate about value creation for customers and key stakeholders. In short, it is vital to help these companies to survive during the MCO and ride-out Covid-19 pandemic as it will spur greater value creation in short and medium-term for the underserved, under-served, the millennials, and bridging incumbent economy with digital capabilities, going forward.

Our Specific Suggestions

We seek the following proposal to be considered by the Government and to be delivered via relevant government agencies, GLCS and GLICs.

(a) Shelter Programs (“SP”)

This is a temporary program during the period of Covid-19 pandemic where qualified Fintech start-ups and SMEs (“the Recipients”) would be taken under the guidance of various government agencies, GLCs and GLICs (‘the Guardians”). Knowing well that the Guardian’s resources are limited too, the proposed Shelter

The program will be divided into two categories –

  1. Category 1: The Recipients that fulfilled at least 80% of the qualifying criteria will be provided collective support based on specific 5-key pillars for a period of 6 months and continuation of support (subject to satisfactory KPIs results) post Covid-19 pandemic.
  2. Category 2: Other Recipients that did not fulfil the above will be given basic support to ensuring their going concern for at least 3-months. Those that improved during this period will be re-evaluated for Category 1 and those that failed will have to close their business.

(b) Pre-qualification Process

In order to facilitate the identification of genuine and committed Fintech companies, FAOM will undertake to evaluate the potential Recipients based on our 5-key Pillar programs prior to joining this program. Results will be shared with the Guardians to ensure consistent quality, relevancy, and to ease management of both expected and unexpected impact.

Expected Outcomes

Under the current circumstance, unprecedented yet structured multiprong actions is needed from all stakeholders to be able to wade through the impact of the CMO and Covid-19 pandemic, for all of us to come out stronger. Having said that, FAOM expected more than 75% of the Fintech start-ups and SMEs would be able to survive if the proposed Shelter Program is implemented by at least 50% of the government agencies, GLCs and GLICs. Our key focus is to ensure the survival of Fintech start-ups and SMEs, during this troubling time, by providing them temporary safe-harbour rather than without. We believed with this proposed structured approach involving multi-stakeholders, the survival rate will be higher and Malaysia will come out stronger eventually.


In closing, this is not a plea for the fund. What we seek, as the B40 of the business world, is to be given a temporary shelter for Fintech start-ups and SMEs that are badly hit by the impact of MCO and Covid-19 pandemic. As shared by other business community groups and industry associations, without businesses, Malaysia recovery post-MCO and Covid-19 pandemic would be slow and haphazard. However, if the Government step in now and provide comprehensive and structured assistance via various agencies, GLCs and GLICs, we stand a better chance to come out stronger thereafter. Thanks for listening to us.

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