Karachi: Pakistan, being an Islamic country, has great potential of growing in Islamic Finance industry but it will take greater efforts at individual and collective level to achieve the maximum potential of the Islamic finance and Islamic microfinance is the key to success. This was said by a top government official of the country.
The Governor of State Bank of Pakistan (SBP), Yaseen Anwar, emphasized on the Islamic finance industry to make individual as well as collaborative efforts to develop Islamic microfinance in the country.
While addressing opening session of the Islamic Finance News Pakistan Road show on Islamic Banking at the SBP, Anwar said that Islamic microfinance, a confluence of two industries, Islamic finance and microfinance, cannot only be an efficient tool for financial inclusion by catering to both voluntary and involuntary financially excluded, but also towards poverty reduction due to its inherent characteristic of being prudent and asset based.
He said that financial inclusion is one of the key strategic objectives of SBP and emphasized the industry to develop capacity to tap strategically important sectors of agriculture and Small & Medium Enterprises (SMEs) and create value for shareholders, depositors, and the country’s economy as a whole. He assured that SBP would provide every support and facilitation to the industry in efforts to build and expand its portfolio in these sectors.
Anwar also said that Islamic banking in Pakistan has witnessed significant growth during the last decade and now constitutes over 10 percent of the country’s banking system with an asset base of over Rs.900 billion and a network of more than 1,100 branches.
He stated, “This expansionary trend is likely to continue and the industry is well set to double its market share by 2020.”
The governor added that the Islamic financial institutions are currently offering a wide range of services catering to both Muslim and non-Muslim communities. The unprecedented growth of the Islamic finance industry can be associated to efforts of dedicated regulatory, Shariah and academic institutions along with the presence of diversified players in the field, i.e., Islamic banks, investment banks, takaful companies, Islamic fund management companies, and Islamic brokerage companies.
Anwar said that Pakistan has remained at the forefront in promoting Islamic finance by being a key member of International Islamic finance institutions established to develop necessary legal, regulatory, supervisory and Shariah-compliant infrastructure for Islamic finance institutions.
He concluded with the remarks that Pakistan’s active engagement with the Islamic Financial Services Board (IFSB), the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the International Islamic Financial Market (IIFM) and collaboration with other central banks has helped the growth of the Islamic banking industry both locally and at the global level.