KUALA LUMPUR, Aug 20 — Almost half of Malaysians ask their family, friends or their employer for financial help during emergencies, despite most actively saving for times of need, according to a World Bank report.
The World Bank’s Global Findex 2014 found that nearly seven out of 10 Malaysians will be able to pool emergency funds, but that nearly four out of 10 have to turn to others to come up with the emergency funds instead of relying on their savings.
The emergency funds were defined as equivalent to 1/20th of the gross national income per capita in a month, which is US$533 (RM2,189).
In comparison, nearly six out of 10 people in high-income nations in East Asia and Pacific will rely on their savings, with fewer than two in 10 turning to family, friends or employers.
According to the report, 1.2 billion adults in developing countries said they would use their savings in case of an emergency, but 56 per cent of them do not even save at financial institutions.
In the Index, over eight out of 10 Malaysians save instead of holding cash, but just over three out of 10 do so in banks.
World Bank said the rest use community savings groups or other saving methods, such as investing in gold or livestock.
The report said Malaysia was among the leaders in financial inclusion in the region, with those having access to banks rising to 81 per cent of respondents in 2014, compared to just 66 per cent in 2011.
Bank access among the poorest 40 per cent of the population also increased from 50 per cent in 2011 to 76 per cent in 2014.
A major factor that contributed to the high penetration is the amount of banking services and products offered by Malaysian banks, including their foray in Islamic banking, said Dr Jose De Luna Martinez, a senior financial economist in finance and markets global practice with the World Bank.
