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Malaysia, Southeast Asia’s third-largest economy, is outperforming its neighbors. Its economy grew 6.4% in the second quarter due in part to another strong showing in exports. Though often not given the same focus as other emerging nations, there is no denying the rapid progress and development that has taken place in the country over a relatively short period of time. This week, Malaysia is put under the spotlight for its effort to advance financial inclusion.

 

At the annual Global Policy Forum (a gathering of central bankers and financial policy regulators) held in Trinidad and Tobago, Malaysia announced that Kuala Lumpur would become the new permanent host for the Alliance for Financial Inclusion (AFI). AFI is a global network of policymakers from 120 financial institutions representing 95 developing and emerging countries, currently based in Bangkok.

 

Petronas Towers, Kuala Lumpur, Malaysia.

Petronas Towers, Kuala Lumpur, Malaysia. (Photo credit: Wikipedia)

 

Malaysia’s interest in being associated with financial inclusion policy is not only part of the country’s overall strategy to elevate its visibility on international economic issues, but is also reflective of the shifting balance of economic strength toward emerging economies in global policy making.

 

According to Dr. Alfred Hannig, Executive Director of AFI, Malaysia has become a world leader in advocating for the 2.5 billion unbanked. “Malaysia’s central bank, Bank Negara Malaysia, is not only promoting financial inclusion efforts for its own citizens, it is supporting other countries and sharing lessons learned. Malaysia is leading through action – a true champion for the unbanked.”

 

 

Following the announcement that Kuala Lumpur would host AFI, Bank Negara Malaysia’s Governor, Dr. Zeti Akhtar Aziz, highlighted her institution’s emphasis on financial inclusion. “Bank Negara Malaysia is committed to the financial inclusion agenda and is honored to have the opportunity to collaborate with AFI and its membership in advancing the development and implementation of policies that will increase the access to financial services for the unbanked segment in the world.”

 

Governor Zeti of the Bank Negara Malaysia announced Kuala Lumpur as the new permanent host of Alliance for Financial Inclusion. 

Governor Zeti of the Bank Negara Malaysia announced Kuala Lumpur as the new permanent host of Alliance for Financial Inclusion. (Photo credit: AFI)

 

Through the G20 and other international policy platforms, economists are increasingly recognizing financial inclusion as an engine for inclusive growth which leads to financial stability and employment. Strategically, financial inclusion enables the government to conduct financial literacy outreach and arrange for proper infrastructure for mobile banking. As in many other emerging and developing countries, Malaysia included in its 10-year economic plan a significant focus on enhancing financial inclusion.

 

Malaysia’s effort to become the global center of financial inclusion is a reminder that emerging economies are creating an alternative to the existing global economic system — and Asia is a driving force.