KUALA LUMPUR, Nov 11 -- Waqf, fintech solutions and the global sustainability agenda were identified as key drivers for the future growth of Islamic finance, Malaysian Institute of Accountants (MIA) Islamic Finance Committee chairman Mohd Muazzam Mohamed said.
He said these three drivers would enable the Islamic finance sector to achieve its higher goals of inclusive development, equitable prosperity, and positive social impact in the post-pandemic economy.
“Over the last 18 months since COVID-19 began, the Islamic finance industry has dedicated much of its development efforts to address the threats and challenges posed by the pandemic, making its impact on building social resilience, facilitating economic recovery, as well as championing the sustainability agenda,” he said at the recent MIA Islamic Finance Conference 2021.
The conference, which was held on Oct 27 and 28, themed “Islamic Finance: Latest Developments and Drivers for Growth in a Post-Pandemic World”.
Mohd Muazzam said the industry’s proactivity in assisting customers with various relief measures, including automatic payment moratorium, targeted payment assistance and extended financial support scheme under the Financial Management and Resilience Programme was aimed at promoting long-term financial resilience.
He emphasised the importance of waqf (Islamic endowment) and social finance instruments as a lever to support the social welfare or ijtima’iy component of the Islamic economy.
“Waqf can have a long-term positive social impact creation by moving Malaysia closer to the ideal path of more inclusive, equitable and sustainable growth,” he said.
Besides, to assist those who have lost their jobs or source of income, the industry continuously explores new innovative financial products and services to create financial solutions that can nurture micro-entrepreneurship.
“Towards this end, a few Islamic banks in collaboration with strategic partners have blended traditional banking offerings with Islamic Social Finance instruments like sadaqah (alms or charity) and zakat (tithe) to create affordable micro-financing product known as iTekad, that is provided along with structured business coaching and training to ensure effective business nurturing,” he said.
Other complementary tools to increase funding access include the Securities Commission Malaysia (SC) Shariah screening assessment toolkit for unlisted micro, small and medium enterprises (MSMEs).
Meanwhile, he said sustainability is now a mainstream agenda across all financial sectors, particularly Islamic finance that has inherent considerations, including being ethical, sustainable and responsible.
“For the Islamic banking and takaful sectors, the shared vision and commitment to champion sustainability agenda is anchored upon the Value-based Intermediation framework by Bank Negara Malaysia,” he said.
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