PETALING JAYA: Retirement Fund Inc (KWAP) has launched a RM20mil microfinancing programme aimed at helping public-sector retirees generate post-retirement income through small-scale entrepreneurship, dubbed Jana MyPesara.

Second Finance Minister Datuk Seri Amir Hamzah Azizan said the initiative comes at a critical time as Malaysia undergoes a demographic transition towards an ageing population.

Based on current projections, he said Malaysia is expected to reach ageing nation status by 2048, when 14% of the population will be aged 65 and above.

“We must take lessons from the Organisation for Economic Co-operation and Development countries such as Japan.

A high and rising elderly population in that country shows how important economic participation among older groups is for long-term sustainability,” he said.

As of now, Amir Hamzah said over 800,000 retirees fall under KWAP’s purview.

However, the minister said many retirees are often constrained by limited access to financing from conventional banks, despite still having the capacity to contribute economically, due to the absence of a fixed monthly income and age-related barriers.

He added that Jana MyPesara aligns with the government’s broader agenda to promote productive ageing and grassroots economic participation.

“As announced in Budget 2026, Jana MyPesara, with an allocation of RM20mil, complements the government’s efforts to build a more targeted social support system that is aligned with the needs of a nation moving towards an ageing population,” Amir Hamzah added.

Separately, KWAP chief executive officer Datuk Nik Amlizan Mohamed said the initiative reflects KWAP’s broader responsibility in managing the nation’s retirement funds with integrity, discipline and accountability.

She said KWAP’s internal surveys showed that many retirees continue to face limited access to financing after retirement.

“Based on KWAP’s survey, some retirees face constraints in accessing financing to help them generate household income after retirement,” she said.

“What is interesting is that the same survey also shows strong interest among retirees in continuing entrepreneurial activities, whether to supplement income or to remain productive even in retirement,” he added.

Nik Amlizan said these findings prompted KWAP to introduce Jana MyPesara as a focused and disciplined intervention grounded in responsible implementation.

She said the programme will be implemented through two main components.

“First, the provision of microfinancing in the form of small-scale loans to help retirees start or expand income-generating activities, with a structure that is appropriate and easy to manage based on their capacity,” she said.

“Second, the provision of training and practical modules, including guidance on financial management and basic business skills, to enhance retirees’ ability to manage their ventures in a more systematic and sustainable manner.”

Nik Amlizan said income stability among retirees would have a broader social impact beyond the individual.

“When retirees achieve income stability, the impact goes beyond the individual. It helps households manage expenses more effectively, reduces financial stress and strengthens retirees’ ability to remain active within their communities,” she said.

The programme is funded by KWAP and managed by Amanah Ikhtiar Malaysia, which has over 30 years of experience in microfinancing and currently supports more than 300,000 borrowers nationwide.

Jana MyPesara targets public-sector retirees with household incomes below RM5,880 per month, or RM1,470 per capita, who are currently engaged or intend to engage in income-generating activities.

The scheme is open to women borrowers only, although male retirees may nominate a female family member to apply on their behalf.