MALAYSIA and Indonesia need to invest more in Islamic finance to ensure their offerings are on par with conventional offerings, said HSBC Amanah Malaysia Bhd today.

In a statement in Kuala Lumpur today, its Chief Executive Officer, Arsalaan Ahmed, said the growth of Islamic finance would support financial inclusion, which has become important in prudent policymaking for regulators.

It is also important for countries in terms of navigating uncertain times by increasing the number as well as the amount of savings within the financial system, he said.

He said that within Malaysia there was a raft of institutions, public, professional and academic set-ups to support countries in developing Islamic finance.

“For Asean countries, particularly sovereigns, the Sukuk market cannot be ignored. It is a tool to access capital. Malaysia uses it as a primary tool and Indonesia as a secondary tool. Both are recent and regular issuers, and both countries are seeing success.

“As the Asean credit story builds and as the use of capital market grows, Sukuk will be a natural part of the funding tool evolution of issuers led by sovereigns and eventually by others,” Arsalaan said. 

He added that Islamic finance was a vehicle for non-Muslim countries to promote financial inclusion and thus greater integration within a country’s systems and institutions.

“A leading example is the UK for supporting their Muslim minority population. Singapore also has a good framework,” he said. – Bernama, September 19, 2017.