By Nurrul Huda Ahmad Lutfi
KANGAR: The growing Islamic financial ecosystem in Malaysia has the potential to attract more investments, not only from Islamic countries but also from investors who prioritise ethical principles and social responsibility.
Associate Professor Dr Mohd Zukime Mat Junoh, senior lecturer at the Faculty of Business and Communication, Universiti Malaysia Perlis (UniMAP), said that one of the attractions of the Islamic financial system is its adherence to Shariah requirements, transparency, and ethics, as well as its diversified investments.
He said investors from Islamic countries seek investment opportunities that comply with Shariah principles, and the developing Islamic finance sector offers various products and services that meet these needs.
“Islamic finance emphasises principles of transparency, fairness, and social responsibility, offering an attractive alternative for global investors — including from non-Islamic countries — seeking to diversify their investments due to its stability and ethical investing,” he told Bernama.
Mohd Zukime was commenting on Prime Minister Datuk Seri Anwar Ibrahim’s speech at the Global Forum on Islamic Economics and Finance (GFIEF) last Tuesday, where he emphasised that Islamic finance ecosystem needs to evolve by focusing on value-based finance, moving beyond profit-driven motives.
Wealth should be shared to uplift communities, and investments should ensure balanced prosperity.
During the event, Anwar also announced an allocation of RM100 million to boost more innovation in Islamic finance.
Commenting further, Mohd Zukime said the Islamic financial ecosystem — which is based on justice, balance, and social responsibility, at the same time emphasising the sharing of risks and profit and prohibiting usury and excessive speculation — must continue to advance to benefit the country’s economy.
This would allow Malaysia to strengthen its position as a global Islamic financial hub, attracting more financial institutions and foreign investors, thereby boosting the national economic growth.
“By eliminating usury and excessive speculation, Islamic finance tends to be more stable and resilient to financial crises. This can help reduce market volatility and create a more stable economic environment,” he said.
Meanwhile, Perlis Islamic University College’s Faculty of Muamalat and Islamic Finance lecturer, Nur Syaedah Kamis, who also attended GFIEF last Tuesday, said the development of the Islamic financial ecosystem is crucial to ensuring Shariah objectives, especially the protection of wealth, are maintained.
“This ecosystem follows Shariah principles to ensure transactions and investments benefit all stakeholders, including the asnaf or those in need.
“The wealth distribution process within this ecosystem ensures that wealth is not monopolised by a few but is enjoyed by all levels of society. This significantly contributes to the national economy in terms of financial stability, market diversification, strengthening the domestic economy, and enhancing social well-being,” she said.
Nur Syaedah said strengthening a resilient Islamic financial ecosystem, aligned with technological advancements and societal needs, enables Malaysia to achieve more inclusive and sustainable economic development.
She said the government’s allocation of RM100 million allocation to boost innovation in the Islamic finance system proves that the government remains proactive in providing opportunities for Islamic finance experts in the country to innovate in developing an Islamic economy that does not solely focus on profit.
“This incentive has certainly encouraged Islamic finance experts, both in the industry and academia, to work together and support the government’s efforts in developing the Islamic financial ecosystem,” she said.
Furthermore, Nur Syaedah said the resulting innovations will undoubtedly benefit and support the asnaf or the underprivileged, thereby preserving social well-being and reducing poverty in the country.– BERNAMA
