The financial industry can play a critical role in building a stable and prosperous economy when it is managed with accountability. This requires redirecting investments into economic activities that deliver a good balance between economic, environmental and social objectives in order to promote human well-being and mitigate global challenges such as climate change, biodiversity loss, or inequalities. Many analysts are now taking a closer look at a ‘green economy’, which promotes economic growth while also achieving sustainability objectives.
The Takaful market in Malaysia is showing steady growth and “in a very obvious way is overtaking conventional insurance” despite global financial and insurance sectors having been hit by the pernicious Covid-19 pandemic, said a London-based independent economist and writer.
In a commentary, Mushtak Parker said while the market share of Islamic banking of the total banking sector is just under 40%, the share of Takaful is way behind at 16% of the total insurance sector in Malaysia.
In the United Kingdom, Islamic finance is no longer mainly confined to London as the country’s main financial hub, but has expanded in recent years in small steps to the north, namely to Scotland. In recent times, this development even accelerated as Brexit has “cooled down” London‘s finance industry, in particular the housing financing and mortgage market, according to the Islamic Finance Council UK, a Glasgow-based a specialist body focusing on the promotion and support of the Islamic finance industry in the UK.
Algeria, under pressure to find new sources of finance, set up a religious body in charge of Islamic finance on Tuesday in a final step towards launching sharia-compliant services.
OPEC member Algeria’s state finances have been badly hit by the sharp fall in global oil prices, with the coronavirus pandemic deepening the country’s financial crisis.
Islamic finance is set to keep expanding in 2020 and beyond as the Gulf Cooperation Council (GCC) countries and Malaysia help drive growth in Shariah-compliant financial products, even though Covid-19 may disrupt sukuk issuance, said Moody’s Investors Service.
In a report today, the ratings agency said Saudi Arabia would remain the world's largest Islamic banking market, while the sector would continue to expand rapidly in Malaysia.
The Islamic Development Bank (IsDB Group) is setting up a special $730 million fund to mitigate the negative health and socioeconomic impact of the COVID-19 pandemic.
The IsDB Group said on Monday that global supply chain disruptions, demand compression, and macroeconomic instability will have severe economic growth and poverty fallout on member countries, if not managed appropriately.
The concept of utilizing sukuk proceeds for the empowerment of working-women is new to this niche industry and it is yet to be adopted. This noble goal will need the support of beyond Islamic finance stakeholders and investors in order to thrive as there are many challenges ahead of its implementation.
Probably the only reference for Women Empowerment Sukuk (WES) came in October 2018 by the New York-based Near East Foundation (NEF) who was planning, at that time, to issue the first tranche of $14.94 million of a developmental impact sukuk, a world first, to fund Syrian women refugees in Lebanon and Jordan. Up until now there is no confirmation if such issuance has taken place.
With mystic peaks, coral reefs, jungles and over 4,000 hours of annual sunlight, Malaysia’s Sabah state is an ideal candidate for clean energy initiatives. But what makes its 50-megawatt solar project, launched in April 2018, special isn’t just its potential to provide electricity to this northern Borneo region. The project is the outcome of funds raised from the world’s first Islamic green bond, with a value of $60 million, unveiled by Malaysia’s Securities Commission in July 2017.
Saudi Arabia’s Islamic Development Bank (IDB) signed an investment agreement in November with i-FinTech Solutions, a Tunisia-based advisory firm, to create a series of shariah-compliant tools to help Islamic banks with liquidity management issues. The first product announced is i-Trade, a blockchain-based, real-time transactional platform that helps conventional and Islamic banks transact with each other.
Blockchain technology is still a controversial topic in Islamic finance. Nevertheless, the Middle East as well as Southeast Asia are home to a growing number of Islamic fintechs.
Malaysia’s takaful market is expected to receive a boost as the government of the Muslim-majority nation seeks to improve access to insurance and increase penetration, according to a report by Fitch Ratings.
The greater adoption of technology, especially in distribution, will help takaful operators reach untapped segments of the population, including younger consumers.