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Empowering MSMEs: Malaysia’s Innovative Credit Scoring Alliance

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In a significant move towards financial inclusion and empowerment, CGC Digital Sdn Bhd, Malaysia Digital Economy Corporation (MDEC), and Payments Network Malaysia (PayNet) have forged a groundbreaking collaboration agreement. Their collective aim is to drive inclusivity among micro, small, and medium enterprises (MSMEs) in Malaysia by pioneering Alternative Credit Scoring solutions.

This partnership holds tremendous significance, signifying a unified commitment to address a substantial RM90 billion financing gap for MSMEs. At the core of bridging this financial divide lies the innovative Alternative Credit Scoring, an initiative led by CGC Digital. This cutting-edge approach delves into alternative data to craft a robust model aimed at facilitating financial access.

CGC Digital will spearhead the partnership by providing digital guarantees, while MDEC will leverage its expertise to connect fintech players and advocate for supportive policies and frameworks. PayNet, boasting an extensive data repository through products like DuitNow (Malaysia’s National QR Code), JomPAY, and FPX, will harness its payment data to support this initiative.

The amalgamation of these resources is poised to benefit MSMEs, even those not registered with the Companies Commission of Malaysia but with transactional data across these various payment channels.

Yushida Husin, CEO of CGC Digital, expressed enthusiasm about the collaboration, “Collaborating with MDEC and PayNet, CGC Digital has identified potential fintech companies to embark on proof-of-concept initiatives. This aims to validate the effectiveness and viability of the Alternative Credit Scoring model, ultimately democratising access to credit guarantees and financial services for MSMEs.”

Mahadhir Aziz, CEO of MDEC, stressed the commitment to drive innovation in the financial sector, “The collaboration underscores our dedication to innovating the financial landscape and addressing the MSME financing gap. Our national strategic initiatives aim to transform digital capabilities and foster tech growth, fostering partnerships to revolutionise credit assessment methods.”

This Memorandum of Understanding (MoU) is envisioned to inspire and scale pilot programmes using Alternative Credit Scoring among industry players. According to Gary Yeoh, Chief Commercial Officer at PayNet, validating the efficacy of Alternative Credit Scoring in business credit assessment could revolutionise traditional methods, marking a tipping point in the financing ecosystem.

The integration of innovative solutions like artificial intelligence and machine learning, leveraging non-traditional data sources such as transactional, utility, rental, and mobile payment records, holds promise in assessing MSMEs’ creditworthiness based on historical payment behaviour.

Recognising the immense potential of Alternative Credit Scoring, the collaborative parties aim to co-create a data-sharing environment that nurtures a vibrant community of fintech companies. This initiative aims to enhance accessibility to financial products for all businesses and individuals while customising financial services, promising to reshape Malaysia’s financial landscape for years to come.

The growth of Malaysia’s gig economy in 2023, thriving amidst the normalisation of post-pandemic activities, showcases the nation’s evolving digital landscape, aided by incentives and growing awareness of digital potential.

Moreover, Malaysia’s strategic investment of RM 510 million in R&D through MOSTI and MOHE aims to elevate the country to the Global Innovation Index’s Top 30 by 2025. An additional RM 76 million supports R&D and commercialisation efforts, fostering innovation and aligning with national growth objectives.

Malaysia restructured its Cabinet, splitting the Communications Ministry from the Digital Ministry to streamline efforts and policies for advancing the country’s digital economy. Communication Minister Fahmi Fadzil highlighted the need for unified coordination across ministries to strengthen the digital sector, addressing past fragmentation in managing crucial aspects.

These moves mirror the nation’s strategic direction outlined in Belanjawan 2024, notably illustrated by initiatives like the groundbreaking Alternative Credit Scoring solutions developed in collaboration between CGC Digital Sdn Bhd, MDEC, and PayNet.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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As a Titanium Black Partner of Dell Technologies, CTC Global Singapore boasts unparalleled access to resources.

Established in 1972, we bring 52 years of experience to the table, solidifying our position as a leading IT solutions provider in Singapore. With over 300 qualified IT professionals, we are dedicated to delivering integrated solutions that empower your organization in key areas such as Automation & AI, Cyber Security, App Modernization & Data Analytics, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

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Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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IBM is a leading global hybrid cloud and AI, and consulting services provider, helping clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,800 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently, and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity, and service. For more information, visit www.ibm.com