Industry
@ Halal | July-August . 2022
Mobilising funding for Islamic fintech Malaysia is staking its claim as a force to be reckoned with the right moves at the perfect time
THE Islamic fintech industry is fast changing , reflecting the robust digital transformation of the global financial sector .
Malaysia , known worldwide as a pioneer in the fintech market , is bolstering the global Islamic market through its phenomenal growth in this economic standing .
According to transaction volume , the country ranks first in market maturity and is one of the top five Islamic fintech markets .
This aim is congruent with the Malaysian government ’ s Shared Property Vision 2030 ( SPV2030 ), which emphasises Islamic finance and the digital economy as Key Economic Growth Activities to assist the country meet its futurevision of evolving into a nation of sustainable growth . This relentless pursuit of innovation will also assure fair and equal distribution across economic status , ethnicities , areas and supply chains .
As many are still navigating development in this area , it is good that we are bettering a few steps forward . However , the issue with this ever-growing market is mobilising funding for the Islamic fintech start-ups , which can be challenging to secure due to numerous factors encircling Islamic finance awareness and investors ’ understanding .
Therefore , funding is a significant factor in achieving multiple successes but a persistent concern for many Islamic fintech start-ups .
In 2021 , IFN Fintech interviewed 200 global Islamic fintech CEOs and founders to discover their biggest challenges in scaling up .
Apart from competing with conventional start-ups for limited venture capital ( VC ) and private equity ( PE ) funding , Islamic fintech entrepreneurs deal with the additional barrier of potential investor resistance or hesitance due to a lack of understanding and appreciation for Shariah-compliant principles and values .
A drive organised by Islamic Finance news and supported by MDEC , the Malaysian Islamic Fintech Initiative is the country ’ s leading industry-driven engagement series aiming to mould the nation ’ s Islamic fintech and mobilise necessary funding for the industry .”
Malaysia is among the earliest ASEAN countries to foresee the importance and benefits of investing in the digital economy .
It further includes the multiple government agencies ’ efforts in accelerating digital presence and MDEC ’ s implementation of many initiatives , policies and infrastructure .
A drive organised by Islamic Finance news and supported by MDEC , the Malaysian Islamic Fintech Initiative is the country ’ s leading industry-driven engagement series aiming to mould the nation ’ s Islamic fintech and mobilise necessary funding for the industry .
Malaysia ’ s financial regulators , Bank Negara Malaysia ( BNM ) and the Securities Commission Malaysia ( SC ), are internationally acknowledged for pioneering one of the most advanced and complex Islamic finance regulatory infrastructures . In addition , given the potential of fintech to reshape the finance sector , regulators have taken the lead in introducing fintech legislation to develop a robust fintech ecosystem comprised of local and foreign market participants .
With the government ’ s strong support for the fintech industry , the country , as a global Islamic finance leader , has become a very appealing option for many ambitious Islamic fintech companies . According to the 2021 IFN Fintech CEO and Founder Survey , Malaysia has the most robust and supportive regulatory environment and Islamic finance architecture for Shariah fintech activities . As a result , Malaysia , after Indonesia , is an ideal hub for Islamic fintech firms planning to diversify into the Asian market .
This article appeared in the August edition of DIGITAL PLUSE , a publication of Malaysia Digital Economy Corporation ( MDEC ).