5 emerging opportunities within Malaysia's gig economy

In our previous article, we explored how the pandemic has unequivocally transformed Malaysia’s job landscape, expanding the pool of gig workers in the country. While this shift reflects the changes in today’s multi-faceted workforce, its expansion has also drawn attention to the various challenges emerging from the gig economy.

We delved deeper into these challenges and explored how new opportunities and innovative solutions could emerge as businesses tackle these issues.

On-demand pay

It can be said that payday is everyone’s favourite day of the month. For the 30 per cent of Malaysians who live paycheck to paycheck, it also serves as a relief to know that they will be more able to continue meeting their commitments and afford the necessities of each month.

In situations where bills are due before payday, however, these Malaysians often will need to fork out more to meet penalties for late payments.

The lack of funds throughout the month has become such a big problem that a third of Malaysian adults do not pay their bills on time.

Less than half of all gig workers in Malaysia manage to meet their daily financial commitments. Rather than issuing salaries on a fixed payday, providing gig workers access to their already earned income can help them reduce their financial burden and enable them to pay off their commitments on time.

This reduces additional late payment fees or, in dire circumstances, the need for these individuals to look for other loans, hence minimising their financial risk.

Emerging businesses:
Companies such as Grab are already offering their drivers the flexibility to withdraw their income as it is earned. A newly launched product in Malaysia called mangro provides gig workers and full-time employees access to a portion of their salaries on-demand before payday.

Beyond innovating when individuals gain access to their earned incomes, mangro is also focused on improving financial wellness for everyone through online courses and a free assessment tool for users to evaluate their financial habits and health personally and receive tips on how to improve it.

Alternative credit scoring

What would a gig worker do if they needed MYR1,000 for an emergency?

According to the UNCDF Centre for Financial Health, 71.4 per cent of respondents would ask their family and friends for help, with only 8.9 per cent willing to apply for a bank loan.

Most gig workers often do not have access to regular incomes or regulated proof of earnings, causing them to fall outside conventional banking requirements.

Banks require good credit scores for loan approvals. This itself proves to be a challenge, as 36 per cent of Malaysians doesn’t have a good credit history, to begin with.

Having a credit card is one of the easiest ways to build one’s credit score. Still, many gig workers may face rejection at the application stage because they cannot suitably prove their income and financial status.

This endless cycle of financial exclusion has created a gap in the market, as banks tend to refrain from offering loans or credit cards to gig workers due to their credit score (or lack thereof).

New formulas to calculate such scores are needed in today’s world, as conventional methods are often not applicable to gig workers. Solutions that leverage both traditional and modern assessment methods will help to promote inclusivity, enabling gig workers’ greater access to financial products and options to not only meet their commitments but potentially expand their service offerings.

Emerging businesses:
GFI Fintech is an example of a startup bank on this opportunity, creating an alternative credit scoring method where potential borrowers take an advanced psychometric test.

With an outcome of more than 90 per cent accuracy, this test leverages artificial intelligence and over 200 data points to assess a borrower’s ability and willingness to repay their loans.

This system can be used as a standalone option for those without conventional credit history or combined with traditional scoring systems for further accuracy.

Micro-savings and micro-investments

Planning for retirement has always been a tricky subject for Malaysians. EPF’s Chief Strategy Officer Nurhisham Hussein has stated that only three per cent of the population will reach the estimated threshold of MYR240,000 in required savings before their retirement.

This figure becomes even more worrying when considering that public retirement schemes like EPF are non-mandatory for gig workers.

Even though saving towards retirement can be difficult, 62.8 per cent of gig workers recognised its importance and expressed their wish to save more.

Due to their fluctuating income, gig workers value the need to save for rainy days but often cannot afford to park their savings in retirement schemes with less flexible withdrawal systems.

Other alternatives to help them grow their wealth, such as investment products, tend to require large amounts of up-front capital, have a minimum lock-in period, and high management fees. On top of that, it was recently revealed that 70 per cent of the Malaysian population still lack primary financial literacy education, often not knowing options are available to help them grow their savings.

Due to this, 32 per cent of Malaysians still prefer to leave their funds in their savings accounts rather than exploring higher returns through investments.

With the increase in the number of gig workers causing these issues to become increasingly prevalent within today’s economy, new types of financial tools are required to help workers save or invest without burdening their daily expenses.

Micro-saving and micro-investing offerings have emerged as solutions that allow smaller deposits to be made with no penalties for early withdrawal.

Emerging businesses:
SaphX Technologies is an example of a business that has created an app called Pod, enabling users to improve their savings by rounding up each purchase made, with a minimum deposit of as little as 10 cents.

GoGet, a Malaysian on-demand part-time worker platform, partnered with Pod to pilot the app among their workers and found that 45 per cent of Pod users were comfortable dealing with financial emergencies of up to a thousand Malaysian Ringgit, whereas only 13 per cent of non-Pod users felt the same.

Platforms like these encourage good financial habits among gig workers, helping them create a safety net during unexpected events.

Alternatively, to encourage gig workers towards micro-investing, a platform called Versa provides similar returns similar to fixed deposits but with the liquidity of a savings account.

This enables users to start investing from as low as MYR1.00, with no lock-in period and a low 0.35 per cent annual fee. They also provide a library of articles to help users improve their financial literacy and better understand how their money is being utilised.


Being a gig worker comes with its own set of benefits, particularly the flexibility to work on your schedule. However, it also comes with certain drawbacks. Gig workers are not given paid sick leave nor covered by a company’s group medical insurance.

When they fall sick, they will most likely lose their earnings during that period and need to bear any medical costs they incur.

While the Malaysian Government requires employers and conventional employees to contribute to SOCSO, a social security protection plan for workplace injuries, only 6.1 per cent of gig workers contribute to it, as it is not a mandatory requirement for them.

Simultaneously, another concerning statistic revealed that while 37 per cent of gig workers have a broad knowledge of insurance schemes that could ease any medical payments, only 18 per cent of them have chosen to have one.

A reason for this could be the high cost of insurance coverage, with the average medical protection policy costing close to MYR2,500 a year. While the average cost of living in a metropolitan like Kuala Lumpur is estimated at MYR3,300 a month, a typical gig worker’s average monthly income is about MYR3,000.

This exemplifies the reason why gig workers are willing to forgo being insured.

Insurance premiums need to be lowered so that more gig workers can afford them. A certain degree of flexibility and customisation will also enable gig workers to tailor their policies better to suit their needs and financial capabilities.

Emerging businesses:
Senang is one example of a solution that offers affordable policy prices by not using agents and brokers, making insurance more accessible to gig workers.

They also offer more job-specific policies that cater to gig workers; for example, their insurance scheme for cleaners starts at MYR1 a day and provides coverage up to MYR2,500 for work-related injuries.

Career mentoring

As with most of the world, the pandemic raised Malaysia’s unemployment rate, resulting in many of those who lost jobs turning to the gig economy to make ends meet. Most of these workers see gigs as a temporary solution whilst they continue searching for full-time employment.

With countless talents being made redundant, reskilling/upskilling programmes are needed to improve the prospects of job seekers. The Centre’s study on gig workers found that 78 per cent of respondents are interested in upskilling themselves.

The Malaysian government has placed a strong emphasis on upskilling and reskilling the workforce, allocating MYR1 billion in 2021 to create new programmes for those who were made redundant.

As of October 2021, only a little more than 150,000 Malaysians have participated in the government’s various programmes.

Completing these programmes also seldom guarantees new job opportunities. 70 per cent of the same group of participants shared that they never received any form of career coaching and strongly believed it would benefit them greatly.

Businesses should leverage the government’s initiative and do more to support the unemployed. Whether through training programmes or career mentoring opportunities, doing so will benefit their fellow Malaysians to regain their footing as the nation recovers.

Emerging businesses:
A startup called FutureLab is one such business that aims to address talent development by connecting individuals seeking career advice with experienced professionals.

As an impact-driven business, FutureLab funds this mentoring programme with revenue from their other services, providing all Malaysians free access to this programme.

As with most industries, the pandemic has been a catalyst for transformation within the gig economy, creating opportunities to address the many challenges arising within this rapidly growing segment.

If you have an idea that will improve equity in the gig economy, share it with us by visiting www.kiplex.com!

This article is co-authored by Kevin Rozario and Shannon Kobayashi of kipleX.