‘Malaysia can lead in Islamic trade finance’
KUALA LUMPUR: Malaysia needs to start capitalising on its role as a global Islamic finance leader and a trading nation to make headways into the largely untapped global trade finance market.
Maybank Islamic Bhd director and fellow of the Oxford Centre for Islamic Studies Datuk Dr Afifi Al-Akiti said collaboration between all stakeholders in the public, private and government sectors was needed to further push this segment.
“Islamic trade finance represents a minority of trade finance. Data from 2016 shows that Islamic trade finance only represents 1.5 per cent of total global trade finance.
“Malaysia has a very good chance of becoming the leader of Islamic trade finance, given our position as the world’s premier Islamic finance hub,” said Afifi at a press conference at the World Halal Conference 2019, here, yesterday.
Malaysia’s total trade grew 5.9 per cent to RM1.88 trillion last year, from RM1.77 trillion in 2017.
Afifi said the government was looking at ways to encourage the private sector, especially commercial banks, to participate in this segment.
“We have discussed this at the Maybank Islamic board level, but for now it is only board talks.”
He said the government should also look at tax incentives as they had helped spur the Islamic mortgage industry in Malaysia.
Halal Industry Development Corp vice-president of industry development, Hanisofian Alias, said the agency was working with the Association of Islamic Banking Institutions Malaysia to push this agenda forward.
Dr Khalid Abdul Hamid, Economics Affairs Ministry director of service industry section, said: “The halal industry is expected to achieve 8.7 per cent of gross domestic product by 2020. In 2017, it was 7.5 per cent.”