by AUFA MARDHIAH / Pic by TMR FILE PIX

THE Islamic capital market (ICM) can play a crucial role in helping us recover from the pandemic and provide avenues to achieve the Sustainable Development Goals (SDGs), Securities Commission (SC) chairman Datuk Syed Zaid Albar (picture) said. 

“Malaysia, as an established ICM leader, is well-placed to showcase the benefits of bringing together environmental, social and governance, and Shariah” he said in his speech at SC-UNDP International Islamic Finance Conference yesterday. 

Globally, Islamic finance assets are projected to be US$3.7 trillion (RM15.54 trillion) in 2024 and Malaysia continues to lead the sukuk market, accounting for roughly 45% of global sukuk outstanding, he added. 

“As you can see, the ICM accounts for over 60% of Malaysia’s total CM. On sustainability, we have pioneered the green sukuk and the social impact sukuk through SC’s SRI sukuk framework,” he said. 

He believes that the impact of investing is another growth avenue for ICM. By integrating impact assessments with Islamic social finance instruments, he said investors will be able to measure its payoffs and outcomes. 

“This also aligns with Islam’s views on reinvesting profits back into society,” said Syed Zaid. 

Another significant megatrend that can influence the pace of economic recovery is greater adoption of technological innovations. 

Last year, the SC and the United Nations Capital Development Fund launched “FIKRA”, an Islamic Fintech Accelerator Programme. 

The aim is to encourage start-ups with innovative solutions for Malaysia’s ICM. Such collaborative platforms can catalyse novel ICM offerings, as well as enhance accessibility and social finance integration. 

“I, therefore, look forward to more intellectual discourse and discussions on how we can connect the dots and achieve greater convergence with the SDGs through Islamic finance,” he said. 

SC deputy CEO Datuk Zainal Izlan Zainal Abidin, meanwhile, said in spite of international recognition of Islamic finance’s potential role to meet social financing needs and SDG funding gaps, certain segments such as waqf and zakat remain under-developed, and should be further harnessed in the immediate term to support the advancement of the SDGs. 

“There is still much more that needs to be done to achieve the targets in 2030. Therefore, it is incumbent upon all relevant stakeholders to raise awareness and drive greater adoption of Islamic finance solutions which can fill some of the substantial funding gap for the SDGs, thus contributing to the common good of the world,” he said.