KUCHING: The potential acquisition of a commercial bank by the Sarawak government is being hailed as a bold and strategic move with the aim of fortifying the financial ecosystem.
Dr. Jerome Kueh, an economist at Universiti Malaysia Sarawak (UNIMAS), believes that this move could play a crucial role in supporting businesses in Sarawak and contribute to economic growth.
Kueh stresses the limited availability of capital poses a significant obstacle for businesses, particularly small and medium-sized enterprises (SMEs), struggling to secure loans due to stringent bank requirements.
The acquisition of a commercial is seen as a solution to address this issue by providing more favourable financing terms tailored to local SMEs.
Furthermore, Kueh underscores the importance of tailoring financial services to meet the specific requirements of the local business community.
“Opportunities and obstacles may differ based on the region or area. Hence, the procurement of a commercial bank will facilitate the adaptation of financial products and services to suit the needs of the local business community,” he said in a recent interview with New Sarawak Tribune’s GOH PEI PEI.
Kueh highlighted that financial inclusion in Sarawak could be enhanced through the acquisition of a commercial bank, especially in rural regions where access to the banking system is limited.
He stressed that financial inclusion is critical for providing access to banking products and services to all individuals and the businesses.
The economist is optimistic that a state-owned commercial bank could improve the efficiency of resource allocation in the financial system by matching those with a shortage of capital to those with excess capital. Additionally, the acquisition could foster enhanced policy coordination and promote cohesion between the government and the finance sector.
Summing up, Kueh said: “In the nutshell, the establishment of a state-owned commercial bank (or by taking over a commercial bank) in Sarawak is both timely and crucial for the improvement of the financial ecosystem, as it can support government policies and cater to the needs of the people and the business community.”
Recently, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg told reporters that the state government is planning to take over another entity to boost the business sector and entrepreneurship.
He does not discount the possibility of the state government taking over a commercial bank in the country. However, he declined to elaborate on a media report, saying the state government planned to increase its shareholding in Affin Bank Bhd to 20 per cent.
In a filing with Bursa Malaysia on Jan 8, Affin Bank said the company’s major shareholder – the Armed Forces Fund Board (LTAT) – had informed it was in discussions with the Sarawak State Financial Secretary for a possible transaction of additional shares in the bank.
As at Dec 29, 2023, the Sarawak State Financial Secretary owned 4.796 per cent equity interest in Affin Bank.
According to Abang Johari, the takeover would be announced in a month or two and that it would be one of three major entities to be wholly owned by the state this year.
