VBI set to be among drivers for Islamic finance
Financing model to assist entrepreneurs build their businesses Sunway’s property division targets RM1.3bil sales for FY19
PETALING JAYA: Value-based intermediation (VBI), which focuses on creating value and impact, is set to be one of the drivers for Islamic financial institutions, Bank Negara Malaysia assistant governor Adnan Zaylani Mohamad Zahid says.
He said the Islamic financial system promotes VBI where Islamic financial institutions are encouraged to adopt more structured frameworks to assess how they create value and impact, particularly in response to changing economic, social and environmental conditions.
“In going beyond profit, VBI is set to be one of the drivers for Islamic financial institutions to assist entrepreneurs to grow their businesses,” he said.
He said this in the keynote speech delivered at the Islamic Finance Rendezvous Series in Penang yesterday.
“This would require an understanding of the entrepreneurs’ specific needs and circumstances prior to recommending a particular product or service, rather than focusing on a predetermined range of services.”
Adnan Zaylani said Islamic financial institutions are also expected to assist and guide businesses to adopt sustainable business practices.
The financing model for businesses and SMEs will be more holistic; including provision of environmental-friendly business solutions, entrepreneurship training and consulting services, he said.
“This model can better assist aspiring businesses to improve efficiency and reduce costs, which will lead to greater sustainability,” he added.
He pointed
out
the
practice
of
Islamic finance is not and should not be exclusive to Muslims.
“Many of its underlying ideas, the pursuit of economic justice and risk sharing align with traditional and conventional economic thinking.
“Mutual
insurance
companies
which derive from risk sharing, limited-purpose banking which moves away from interest-based or fractional banking and equity financing, are all ideas consistent with Islamic finance principles, and are practised across the world without any reference to the religion. Indeed, Islamic finance is for all,” he said.
Adnan Zaylani said a recent survey by Bank Negara revealed that almost 60% of SMEs were not aware of the availability of Islamic business financing facilities.
Indeed, most SMEs adopted conventional financing. Some may still have the misconception that Islamic finance is only for Muslims, he said.
He said Islamic finance is an established industry in Malaysia. Islamic banking assets stood at RM874bil or 30.4% of total banking assets as at end September last year, with an annual growth of 10% over the past three decades.
The end of Q3 last year also saw takaful contributions amounting to RM1.7bil with market penetration at 15%.
Adnan Zaylani said growth of Islamic finance in Malaysia has been resilient and supportive of social and economic developments.
“What underlies this growth is the robust foundation and building blocks that the government and Bank Negara, together with the industry, have worked towards, namely in infrastructure development, institution building, robust regulatory framework and product development.
“We are now at a stage where we view that the foundations are solid and the industry is ready to deliver solutions to meet your needs,” he said. PETALING JAYA: Sunway Bhd, which has lined up several property launches this year, is targeting new sales of RM1.3bil for its property division for the financial year 2019 (FY19).
The new launches are expected to have a combined gross development value (GDV) of RM2bil, AmInvestment Bank said in a report yesterday
However, the target of RM1.3bil is 28% lower than FY18’s actual new sales of RM1.8bil, it noted.
The new sales of RM1.8bil chalked up in 2018 exceeded its target of RM1.7bil.
“Sunway’s balance sheet remained healthy with a net gearing ratio of 45% as of the cumulative period (9MFY18).
“With the capex requirement for the expansion of its healthcare business and ongoing property development, we expect net gearing to stay above 45% in the next three years,” the research house said.
Sunway has previously launched several projects in 2018 with a combined gross development value (GDV) of RM2.1bil.
The projects launched were Rivercove Residences EC in Singapore (GDV RM590mil), Sunway GEOLake (GDV RM480mil), Sunway Citrine Lakehomes Phase 2, Sunway Iskandar (GDV RM80mil) Sunway Gardens, Tianjin, China ( GDV RM600mil) and Sunway Velocity TWO Phase 1 (GDV RM320mil).
In the central region, projects that slated for launch this year are Sunway Velocity TWO Phase 2 (GDV RM300mil), Sunway Avila (GDV RM230mil) and Sunway GEOLake Residences (GDV RM100mil). In Ipoh, there is Sunway Onsen Suites ( GDV RM120mil).
In the southern region, Sunway will roll out Sunway Citrine Lakehomes Phase 3, Iskandar (GDV RM100mil), Sunway Lenang Heights (GDV RM150mil), and the Brookvale, Clementi in Singapore (GDV RM1bil).