Muslim World Needs To Develop Revolutionary Method In Islamic Finance

KUALA LUMPUR, Oct 21 (Bernama) -- The Muslim world needs to develop a revolutionary method in Islamic finance to allow entrepreneurs and financiers to leverage each other to contribute to the nation's economic growth sustainability, Najib Razak said. The Malaysian prime minister said Islamic countries had made remarkable progress and became a significant group in the global economy as the total gross domestic products of the Organisation of Islamic Cooperation (OIC) countries had grown to US$9.4 trillion in 2012 from US$7.5 trillion. The numbers showed that the Muslim world has limitless potential, he said in a keynote address at the Association of National Development Finance Institutions in Member Countries of the Islamic Development Bank (ADFIMI) - SME Bank International Forum 2014 here Tuesday. "The Muslim world through organisations, such as ADFIMI, must continue to emphasise that Islamic nations are peaceful sovereigns and a source of prosperity for the world. "Our potential is enormous if we are organised and get our act together," he said. The prime minister said as an Islamic finance pioneer, Malaysia could and must play an influential role in ensuring the sector's future development. "Ten years ago, Malaysia issued the world's sovereign sukuk. Today, Islamic finance is a US$1.2 trillion market; this is expected to rise to US$2.6 trillion by 2017. Islamic finance is now growing at 50 per cent faster than conventional banking," he said. Hence, Najib called on small medium enterprises (SMEs) to make greater inroads in Islamic finance as one of the fastest growing sectors in a crowded financial marketplace. Najib drove home the point that there were some issues that needed to be rectified by the industry, such as regulatory hurdles, lack of consumer education and the need for more business-friendly policies. In Malaysian context, he said, the government aimed to increase the SME macroeconomic contribution to 41 per cent of the GDP, 62 per cent of employment and 25 per cent of exports by 2020. "This is a tall order, but I believe this is achievable and attainable," he said. Najib noted that US$3.68 billion (RM12 billion) was spent for 157 SME development programmes last year that supported nearly 890,000 projects across all economic sectors. He said that this year the spending rose to US$3.98 billion (RM13 billion) and almost half of the funds came from the private sector. Present were Bank Negara (Malaysia's Central Bank) Governor Dr Zeti Akhtar Aziz, Khazanah Nasional Bhd Deputy Chairman Nor Mohamed Yakcop, SME Bank Group Managing Director Mohd Radzif Mohd Yunus, and ADFIMI Chairman Mehmet Emin Ozcan. --BERNAMA