Thursday September 20, 2012
Significant potential for Islamic finance
KUALA LUMPUR: There is still significant growth potential for Islamic finance in Malaysia and Indonesia as well as the rest of the Asean region, said HSBC Amanah Malaysia Bhd chief executive officer Rafe Haneef.
“Malaysia and Indonesia are countries with large Muslim populations. In Malaysia, Islamic finance is 25% to 27% of the total banking market. If you look at the capital market, it is more than 60% or 70%.
“And given that the ecosystem here is quite complete, its sustainability can be maintained for a long time,” said Rafe at a session on “Potential for Islamic Finance and Asia” at the 3rd Global Islamic Finance Forum (GIFF 2012).
“In Indonesia, the Islamic banking market share is around 3%. Now, they are putting the pieces together to create the right ecosystem,” said Rafe.
As for Asean countries with Muslim minorities such as Singapore, the Philippines and Thailand, Rafe said their governments needed 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.”