The centre for Islamic Financial Technology (Fintech) is headed by Malaysia and currently there are 47 Islamic Fintech businesses operating in the country.
One of the unexpected outcomes of the COVID-19 pandemic has been the accelerated adoption of fintech applications, said Sultan of Perak, Sultan Nazrin Muizzuddin Shah at the Islamic Finance Forum Kuala Lumpur (KLIFF 2022) yesterday.
He said currently Indonesia has 41 Islamic Fintech businesses, 29 in the United Arab Emirates and only 24 in Saudi Arabia.
“The Islamic Fintech sector leverages technological advances to provide alternative and affordable financial solutions that help to bridge the financial inclusion gap.” he stated in his Royal Speech at the KLIFF 2022’s opening ceremony.
By 2025, Islamic fintech transactions are expected to reach USD128 billion, up from USD49 billion in 2020, he said.
Sultan Nazrin said the substantial growth of the market will be driven by the financial services to currently unbanked and under-served populations and sectors, that includes small and medium enterprises and micro businesses.
Malaysia’s Islamic capital market grew by 11% in 2020, up from 8% in the previous year. However, the market’s value were estimated at USD500 billion by June 2022, he added.
“Malaysia continues to lead the Sukuk market, with about 40% of the world’s outstanding Sukuk and in June this year, it accounted nearly 30% of all Sukuk issuances globally.” Stated Sultan Nazrin.
According to the Islamic Finance Development Report of 2021, Malaysia ranks as the leader in Islamic Finance among 135 countries and Malaysian banks are appointed as the arranger and lead administrator of state-owned Sukuk for other jurisdictions, including Turkiye and Hong Kong, he added.
Despite all these developments, it is required to ensure that existing policy frameworks can accommodate innovation and develop new strategies, said Sultan Nazrin.
