KUCHING: The state government’s move to acquire an additional stake in Affin Bank is a strategic step in strengthening the financial ecosystem.
Economist Dr Jerome Kueh said this would assist businesses in Sarawak and contribute to the sustainability of economic growth.
He stated that one of the main obstacles in business is limited access to capital, especially for Small and Medium Enterprises (SMEs) struggling to secure loans.
“This difficulty is due to banks imposing strict requirements… hence, these constraints indirectly put pressure on the growth of the SMEs sector. With the Sarawak government acquiring a bigger stake in a commercial bank, it can tailor and offer more suitable financing terms, especially to small companies and SMEs,” he said today (Jan 31).
He added that this move by the Sarawak government is therefore crucial to align financial services based on its own standards to meet the specific needs of the local business community.
Kueh said opportunities and challenges might differ across specific areas, thus facilitating adjustments to financial products and services to meet the needs of the local business community.
At the same time, he said inclusivity in the financial sector in Sarawak could be further enhanced through the move to acquire additional holdings in a commercial bank.
He said that this would facilitate financial inclusivity in rural areas where access to the banking system is somewhat limited.
“Financial inclusivity is important to provide access to banking products and services to all individuals and business communities. It can help improve the effectiveness and efficiency of resource distribution in the financial system by aligning the needs of those experiencing shortages and capital requirements with those who have excess capital,” he said.
He stated that acquiring additional holdings in Affin Bank would facilitate better and integrated policy coordination in the long term.
“Considering the ever-evolving and dynamic business environment, it is crucial to have a banking policy aligned with the state government’s policy to ensure significant and beneficial outcomes for the population and the overall economic progress of Sarawak.
“Overall, the move to acquire additional holdings in the commercial bank is timely and essential to enhance the financial ecosystem, as it can support government policies and meet the needs of the people and the business community,” he added.
