September-October . 2022 | @ Halal
Finance
19 try had untapped potential with the growing demand for halal pharmaceuticals , which is expected to reach RM435 million by 2024 from RM390 million in 2019 .
Public and private funding for innovation and R & D was needed to manage risks and attract long-term investors . The Halal Development Corporation ( HDC ) data showed that 13.5 per cent of RM36.3 billion in halal exports in 2021 came from SMEs , while 86.5 per cent came from multinational corporations ( MNCs ).
Malaysia ’ s halal certification issued by JAKIM is globally recognised as a highly credible halal credential . It is accepted by 84 other halal certifying bodies in 46 countries , more than any other country ’ s halal credential .
Malaysia ’ s halal certification benefits halal export players . Many MSMEs are not fully integrated into the global halal supply chain because they lack certification , expertise , network , and funding .
There also needs to be a collaboration between the private and public sectors to develop brand value and use social media to increase brand awareness and interest .
“ Trade expositions such as the World Halal Business Conference ( WHBC ), organised by HDC , and Malaysia International Halal Showcase ( MIHAS ), organised by the Malaysia External Trade Development Corporation ( MATRADE ), also in association with HDC , are important platforms to showcase Malaysian brands .”
Islamic finance ecosystem
Mohd Shahar assured that Malaysia ’ s Islamic finance ecosystem was mature and could support the halal industry .
The domestic Islamic finance industry
is 30 years old , and Malaysia has several full-fledged Islamic banks , including foreignowned ones . Bank Negara Malaysia ( BNM ) and the Securities Commission ( SC ) manage Malaysia ’ s well-established financial regulatory framework with well-designed rules and regulations .
The country has shown steady growth in fintech investments and activities , with Malaysia ’ s fintech sector growing by 27 per cent in 2021 to 294 companies .
In the Halal Industry Master Plan 2030 , Islamic finance is one of the key enablers to support plan implementation through innovative Islamic financing structures .
This plan outlines several recommendations to improve Islamic finance ’ s role in funding quality , innovative and competitive halal industry offerings , developing highperforming homegrown enterprises , and spurring sustainable , balanced , and inclusive socio-economic growth .
Collaboration between the public and private sectors will be vital to mobilising funding to the halal industry – by merging expertise to innovate alternative funding solutions and sharing risk .
One-stop centre for halal business support
The potential of Islamic social finance instruments such as waqf and zakat could be explored further to develop micro-enterprises among Bumiputera halal industry players .
At the end of 2021 , HDC launched the Halal Integrated Platform ( HIP ) – a digital platform connecting halal industry players globally and is a one-stop centre for halal business support such as halal certification advisory , export , and funding facilitation .
As of 2021 , five Islamic banks have become strategic partners of the platform . HIP has excellent potential to become the leading global marketplace for halal industry players and would encourage other financial providers to collaborate with HDC to make HIP a success .
Malaysia ’ s halal industry development requires integrating Islamic financial products and services and sectoral activities , including capital raising and financial inclusion of MSMEs .
With the Halal Industry Masterplan and active participation from financial regulators , financial institutions , halal agencies such as HDC , JAKIM , and industry players , Islamic finance can play a more significant role in Malaysia and the global arena .
He declared the Ministry of Finance would continue to work with BNM and the SC to position Malaysia as global Islamic finance and halal economy leader .