The Social Exchange: Strengthening Malaysia’s Social Finance Ecosystem

The Social Exchange is a great initiative by the Securities Commission Malaysia (SC). It is not just an initiative, but a statement that we are not just thinking about the capital market just for money, but capital market for a purpose.

We live in a time where the challenges facing our communities – healthcare, disaster resilience, social mobility and inclusion – require innovative and impactful solutions.

The broad challenges that we face, I would say, are how to ensure that the Gen Z won’t feel the need to protest, thus we must deal with what they care about most: jobs, wages, and upward social mobility.

On the other hand, we need to deal with the question of an aging society, we need to create a strong middle class with adequate social safety nets so that our people get rich before we get old, and further, we need to be prepared for the impact of climate change.

These are not short-term issues with quick fixes. They are structural and complex, requiring coordinated and long-term remedies that are backed by sustainable funding sources and stronger multi-sector collaboration.

Globally, “giving back” remains a deeply embedded trait across societies. In 2024, close to 64% of the world’s population donated money to good causes, underscoring the strong foundation of goodwill that exists. It also reflects an inherent opportunity to channel charitable contributions more effectively towards impactful outcomes.

Looking ahead, this potential pool is expected to grow significantly. Total spending by the global middle class is expected to double to almost US$64 trillion by 2030. Even a small shift such as allocating just 0.5% of this spending towards charitable and social causes could increase annual donations by an additional US$319 billion.

At the same time, advances in technology are reshaping how “giving back” takes place. Digital platforms are creating new opportunities to scale philanthropy, improve transparency and strengthen trust.

Therefore, establishing a structured and transparent avenue for this confluence of funding, purpose and technology is a logical step forward. By enabling contributions to be channelled effectively via the Social Exchange towards projects that make a difference, it is an opportunity to turn goodwill into measurable outcomes. It also demonstrates the capital market’s ability to be a force for social growth.

In fact, today’s official launch of the Social Exchange marks a significant milestone not just for Malaysia’s capital market but also for Malaysia’s social finance ecosystem.

The Social Exchange also aligns closely with the aspirations of Ekonomi MADANI, which was launched in this hall three years ago, where inclusivity, sustainability and shared prosperity are central to our economic vision.

We are dealing with all these societal challenges and Malaysia perhaps has an opportunity to innovate new ideas.

One of the areas that we can work on is healthcare. How do we imagine our market? In the health sector, we often talk about the public vs private sectors. But it is not necessarily always a dichotomy. There is actually quite a huge domain in the middle.

This “middle” domain can be moderately profitable but is transversely regulated by the society, by the market and by some government regulations. It can be social in orientation but market in mechanism.

It is critical to strengthen trust and confidence in the third sector comprising voluntary and community organisations. We still see the third sector or the “middle” domain as non-profit. But I think at some point we should think of the third sector as not entirely non-profit but a mixture of social purposes with some market mechanisms.

This is why I think Ekonomi Madani has created a framework for us to put solidarity at the centre of our economic policy.

One of its key strengths of the Social Exchange lies in its robust regulatory and governance framework, developed by the Securities Commission Malaysia (SC). This is critical to strengthen trust and confidence in the third sector comprising voluntary and community organisations.

By enhancing transparency, credibility and accountability, this initiative will complement government efforts to strengthen community resilience and social welfare through the exchange as a platform but with proper safeguards.

A strong and inclusive society underpins long-term economic resilience. By enabling better allocation of resources towards social priorities, we are strengthening the foundations for sustainable growth, while ensuring that the Rakyat is not left behind.

While the current focus of the Social Exchange is donation giving to non-profit organisations or NPOs, the broader intention is for this platform to create beneficial spillovers that will deepen Malaysia’s social finance infrastructure.

This includes establishing a credible pipeline of social impact projects, strengthening governance and reporting standards for the third sector and attracting participation of both institutional and individual donors.

As the ecosystem matures, the Government hopes to see a wider range of activities and stakeholders involved. This includes social enterprises and communities, as well as funding for environmental conservation, community resilience, water assets and other climate-related efforts.

Over time, this will encourage further innovation that will contribute towards an even broader spectrum of market-based instruments that will strengthen the capital market’s role in supporting social and development outcomes.

As with any early endeavour, the Government recognises that support is needed to catalyse greater participation.

Under the 2026 Federal Budget, a RM2 million grant has been allocated to help lower the cost of non-profit organisations (NPOs) participating on the platform. The Government has also accorded parity of tax incentives to eligible NPOs and donors.

These measures are intended to reduce barriers to entry and support the development of a more vibrant and inclusive domestic social impact financing ecosystem.

Malaysia’s economic and social resilience.

I would like to take this opportunity to invite all stakeholders – non-profit organisations, corporates and individuals, philanthropic organisations, as well as Islamic authorities and institutions – to participate in this movement. I would also like to commend the SC for its thought leadership and commitment in advancing this catalyst for change.

On that note, I am pleased to officially launch the SC’s Social Exchange initiative, and congratulate Impakrintas on being Malaysia’s first Social Exchange platform.

This is my keynote address delivered at the Launch of the Social Exchange by Securities Commission Malaysia on Monday, 25 May 2026 at the Securities Commission Malaysia.