Kuala Lumpur: Islamic Finance sector can still go very far on the road of success especially in Malaysia and Indonesia as well as in ASEAN countries because there is a lot of untapped potential in the industry.
These views were shared by one of the top experts in Islamic Finance, CEO at HSBC Amanah Malaysia Bhd, Rafe Haneef, who believes that ASEAN countries can dig more benefits from Islamic Finance.
He said that there is still significant growth potential for Islamic finance in Malaysia and Indonesia as well as the rest of the ASEAN region.
Haneef stated, “Malaysia and Indonesia are countries with large Muslim populations. In Malaysia, Islamic finance is 25-27 percent of the total banking market. If you look at the capital market, it is more than 60 or 70 percent.
He continued, “And given that the ecosystem here is quite complete, its sustainability can be maintained for a long time.”
He shared his views while addressing a session on “Potential for Islamic Finance and Asia” at the 3rd Global Islamic Finance Forum (GIFF 2012) in the Malaysian capital, Kuala Lumpur.
“In Indonesia, the Islamic banking market share is around 3 percent. Now, they are putting the pieces together to create the right ecosystem,” he added.
As for ASEAN countries with Muslim minorities such as Singapore, the Philippines and Thailand, he said that their governments need to do more to sustain the viability of Islamic banking.“What we see in those countries is that there is huge growth on the deposits side. In terms of finding the right mix of assets, it is challenging. It is not easy to sell Islamic finance proposition to the top-tier credits,” Haneef concluded.