in our economy has also been supported by increased lending by banks, including to households. for a number of advanced economies, this trend has become a source of concern. this is in view of their rising household debt that have exceeded prudent levels in the range of 80 - 100 % of gdp. household indebtedness in malaysia has, however, remained within prudent levels at 60 % of gdp. another important consideration that needs to be taken into account is the ability of households to service their debt. with rising income levels, the household sector in malaysia has continued to accumulate net financial savings as reflected in higher accumulation of deposits against accumulation in debts. household deposits, as a percentage of gdp, remains high at 67 %. strong household debt servicing capacity is also reflected in the continued improvement in non - performing loans ratio of the household sector, which declined from a peak of 12. 2 % at end - 1998 to 8. 1 % at end - november 2003. amidst low and stable inflation, the cost of financing has been kept low to promote sustained consumption and, of greater importance, to stimulate stronger investment activities. the positive effects of increasing bank lending, especially to small businesses, have been an important factor in supporting the domestic economy. as at end - november 2003, bank lending to small and medium scale enterprises expanded by 9 % year - on - year, accounting for one - third of the share of business loans. the growth of the small and medium scale enterprises is important in supporting a more balanced economic structure that will enhance malaysia's potential for economic expansion and employment. the merdeka savings bond will provide malaysians with an additional avenue and incentive for savings. for retirees who spend out of their pensions and accumulated savings, returns on their savings is an important source of income to support their consumption. the individual responsibility to have in place a sound long - term retirement income strategy, that integrates private savings, contributions to the employees provident fund and supplementary private pension and annuity plans, has therefore become important. ladies and gentlemen, this is not the first time that bank negara malaysia has issued such bonds. the second and third series of the malaysia savings bonds, which were issued in november 1999 and february 2002 respectively, had the same underlying objective. each time, the features of the bonds have been enhanced. the merdeka savings bond is for retirees who are 55 years old and above, and who do not have a full - time job. armed forces personnel who

heart of their strategy, and 31 % are already purchasing the services of fintech companies. many are also partnering with fintech companies. for bank negara malaysia, we have also embraced the fintech agenda, setting up our internal fintech working group in 2016, launching our fintech sandbox not long after that and finally, organising our very own industry conference – the myfintech week in 2019. to be future ready, we are highly committed to support the digital transformation of the financial sector. earlier this year, we issued the e - kyc policy document to enable digital on - boarding of customers to occur anytime and anywhere. this is expected to be a catalyst in the provision of end - to - end financial services, particularly in a ‘ low touch ’ environment. the financial industry is taking steps to ensure safe and secure introduction of e - kyc, with several banks planning to launch e - kyc solutions in the coming months with more to follow in 2021. we are also currently in the final stages of developing the licensing framework for digital banking, which we envision can enhance access to affordable and quality financial solutions, particularly for the underserved and hard - to - reach market segments. from our sandbox experience, we also observe similar digital alternatives and solutions being developed in the insurance and takaful sector. our shift towards e - payments has also been sustained, with a 47 % increase in the volume of transactions made through internet and mobile banking, and a 260 % increase in active e - wallet users between august 2019 and 2020. furthermore, good progress has been made in enabling the interoperability of e - wallet services offered by banks and non - bank e - money issuers. looking ahead, bank negara malaysia 1 / 3 bis central bankers'speeches will continue to focus on fostering well - designed regulations to facilitate digitalisation and innovation in financial services. all these efforts are intended to support the financial services industry accelerate its transition to an age of digitalisation and innovation. we have high hopes for islamic finance to capitalise on this. in 2017, we launched the value - based intermediation ( vbi ) initiative. vbi encapsulates the industry ’ s vision to be more impact driven, reinforcing the overarching intent of shariah to promote good and prevent harm on the people and planet, which closely aligns with the global shift towards sustainable finance and esg. through the vbi initiative, islamic financial institutions have also been