Govt to commit RM100mil to foster innovation in Islamic finance - PM

KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim has reiterated the government’s commitment towards Islamic finance innovation via partnerships, and announced a commitment of RM100 million to boost more such innovations.

In line with the commitment, Anwar, who is also the Finance Minister, has announced two new blended finance innovations -- a pilot programme on greening halal businesses, and ‘Project Hassan’.

The greening halal businesses pilot programme is a collaboration between the Islamic Development Bank (IsDB), the Ministry of Finance, Bank Negara Malaysia (BNM) and the World Bank.

Anwar said the programme aims to assist halal businesses in Malaysia in transitioning to greener and sustainable practices by providing technical capacity building, tools to measure and report greenhouse gas emissions, transition financing and certifications.

Meanwhile, Project Hassan is a collaboration between Lembaga Zakat Negeri Kedah, MIFC Leadership Council (MLC), Association of Islamic Banking and Financial Institutions Malaysia and INCEIF University, aimed at upscaling zakat initiatives to elevate the socio-economic conditions of the asnaf in Kedah.

"Through this collaboration, RM10 million is targeted not only to strengthen the asnaf community but also improve the direct benefits of harvest for the paddy farmers,” he said in his keynote address at the Global Forum on Islamic Economics and Finance (GFIEF) today.

Beyond this, Anwar said Malaysia must also innovate and leverage the concept of waqf.

"In March 2024, the government approved a RM100 million grant towards the establishment of a MARA waqf endowment fund, focused on crowding in private contributions towards furthering education and entrepreneurship,” he said.

He added that the government has extended tax incentives to cover stock-based waqf initiatives, and had set aside RM500 million of loan financing for the development of property developments on waqf land.

"Additionally, the Securities Commission (SC) will introduce fundraising for waqf developments through peer-to-peer financing and equity crowdfunding platforms, with the government providing matching funding through the Malaysia Co-Investment Fund (MyCIF) at a zero per cent financing rate,” said Anwar.

In his speech, the prime minister welcomed more initiatives in this space which will broaden the economic horizon and create diverse opportunities for small and medium businesses as well as underprivileged individuals.

"Transformation is not only about addressing gaps, it is also about embracing and adapting to the future,” he said.

Furthermore, Anwar noted that achieving Shariah compliance in digital assets and smart contracts is not enough.

"We must ensure that these technologies are developed and implemented in such a way as to empower our people, create greater unity and cohesiveness among our countries and give us greater freedom to build sustainable and resilient societies,” he added. - Bernama

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