Malaysia to improve financial health of workers in the gig economy

In partnership with APEC Malaysia 2020, Bank Negara Malaysia (BNM), the Malaysia Digital Economy Corporation (MDEC) and the United Nations Capital Development Fund (UNCDF) launched the Financial Innovation Gig Economy Challenge in March 2020. The challenge is an initiative to call for innovative solutions to improve the financial health of gig economy workers. The Financial Innovation Gig Economy Challenge was funded by MetLife Foundation through the i3 (Innovate, Implement and Impact) Program.

Malaysia has a growing gig economy with 26 percent of its workforce either self-employed or operating independently. This statistics come from a study conducted by the World Bank. Much of this is driven by the on-demand gig economy. Ride-hailing and food-delivery services provide a substantial portion of work. A typical characteristic of the gig economy is flexible working hours and greater employee autonomy. However, the short-term and non-binding nature of the relationship between the platform operators and its employees can be challenging for gig workers. 

Solutions challenge crucial for post Covid

The Challenge is in line with Malaysia’s focus under the APEC Finance Ministers’ Process on mitigation and recovery measures in light of the COVID-19 pandemic. It seeks to leverage digitalisation to support business viability and promote sustainable economic recovery. The Financial Innovation Gig Economy Challenge received more than 100 submissions globally. From that, they selected 10 teams to participate in an intensive, eight-week bootcamp and innovation programme. During the programme, Malaysia served as a testbed to refine these emerging ideas to improve the financial health of gig workers in the Asia Pacific region. 

Over the course of the programme, the companies received various support to enrich their solutions. This support included firstly, insights on the gig economy in Malaysia. Secondly, human-centred design tools. Thirdly,  access to industry players. Finally, mentoring from respective subject matter experts. During the final round of pitches, an esteemed panel of judges selected the top three solutions. The three solutions would receive further support from UNCDF to test and scale their solutions with gig workers in Malaysia.

3 Solutions for Malaysia Gig Economy

The three solutions were PAY:WATCH, Versa and GetHyred. The selection was based on the potential to improve employability and financial health among gig workers. This improvement would be through innovative means such as app-based training modules, income smoothing solutions and accessible savings instruments.

PAY:WATCH, Versa and GetHyred showcased their promising solutions at the APEC Virtual Finance Ministers’ Meeting (AVFMM) on 25 September 2020. A brief description of the winning solutions is as follows:

• PAY:WATCH partners with employers and banks to provide workers instant access to earned wages, in real time, before pay day. PAY:WATCH minimises the likelihood of gig workers having to turn to informal lenders.  Gig workers receive access to low-cost financing from major reputable banks. PAY:WATCH minimises the likelihood of gig workers having to turn to informal lenders. 

• Versa is a digital cash management platform. Its unique feature is it provides returns on par with Fixed Deposits, but with similar liquidity as a Savings Account. This helps gig workers get the best out of their idle cash responsibly, while meeting liquidity needs.

• GetHyred is launching a gig marketplace coined as “Zasss”. Zasss matches young gig workers to income-generating opportunities. Zasss complements a myriad of skill-building platforms established by GetHyred. This encourages young gig workers to develop a variety of skills and expertise.

To find out more about the solutions for Malaysian Gig Economy visit the link here.