KUALA LUMPUR, Feb 3 — Hawkers have long been integral to Malaysia’s socio-economic fabric.

Today, they are a critical component of urban life, providing essential goods and services to both rural and urban communities.

Boom or bust, they are the go-to source for affordable food for all income class.

Yet until this day, crucial policy support for these micro traders are still lacking, according to Khazanah Research Institute, which put out a report that studied hawkers’ cultural and economic significance this morning.

The “Hawkers and Hawking Space in Malaysia: A Case Study”, which aimed to provide insights into the hawkers’ landscape, highlighted various hurdles that prevent them from reaching their full potential as a cultural and economic force, including bureaucratic and financial constraints.

“Despite their importance in the economy, hawkers face significant challenges that hinder their growth and sustainability. Key issues include regulatory constraints, limited access to financing and increasing competition from formal retail sectors,” the reseachers said.

“These challenges are compounded by fragmented policies and insufficient institutional support, leaving many hawkers excluded from formal economic systems.”

Formalisation is important because it opens up pathways for hawkers to operate while complying with the rules and regulation.

The most common problems that often comes with unlicenced trading is spatial conflict and health risks.

KRI researchers said unlicencsed hawkers remain a prevalent problem, a reflection of gaps formalisation.

“The persistent challenge of unlicensed hawkers highlights gaps in formalisation. Regulatory reforms need to streamline licensing processes, offering accessible and affordable pathways for hawkers to legalise their operations,” said Mohd Amirul Rafiq Abu Rahim and Goh Hao Yi, the report’s authors.

“Simplifying compliance requirements and decentralising approvals to local councils could reduce bureaucratic barriers and incentivise formalisation.”

A key finding from the study noted how important hawkers are both culturally and economically.

The study said hawker do more than just provide diverse and affordable food options, but also serves as an easy pathway to employment, especially in regions with weaker formal employment opportunities.

The researchers said hawkers serve as a “safety valve” for employment, providing livelihoods for individuals with limited capital, education, or skills and addressing poverty and income inequality.

“And by offering fresh and cooked food at affordable prices, hawkers cater to diverse income groups, ensuring accessibility and affordability in food supply systems,” they added.

But perennial issues like the lack of space and barriers to loans and credit can make trading far less accessible than it should be, the report noted.

As such, the researchers said planning policies must prioritise affordable, well-organised hawking spaces in high-demand areas like commercial and residential zones.

It can also involve creating hawker zones with heritage status or creating incentives for traditional food vendors.

The researchers said this could help maintain the cultural essence of street food while boosting tourism and local pride.

“Initiatives under the Kuala Lumpur Structural Plan 2040, which aims to expand informal business zones, could serve as a guide for replicating similar approaches nationwide,” they wrote.

Financially, there should be microcredit schemes tailored to hawkers that facilitate investments in permanent structures and technology adoption, KRI said.

“This can be done with the collaborations between financial institutions and fintech platforms can provide innovative financing solutions for informal entrepreneurs,” the report said.

Still, many of the policy recommendations may be contingent on future research on the subject. KRI said interdisciplinary research remains necessary to address gaps from the current study.

“Such studies will not only enhance our understanding of hawking culture but also inform policies that support the sustainability and growth of this sector in our rapidly urbanising economy,” the think tank said.