Ms Usha Rao-Monari, UN Under-Secretary-General and Associate Administrator, UNDP,

Mr Mohamed Abida, Head Islamic Development Bank, Centre of Excellence, Kuala Lumpur,

Mr Yusry Yusoff, Chief Executive Officer, Islamic Banking and Finance Institute Malaysia (IBFIM),

Dr Azura Othman, Chief Executive Officer, Chartered Institute of Islamic Finance Professionals (CIIF),

Distinguished delegates, Speakers,

Ladies and gentlemen,

Assalamualaikum Warahmatullahi Wabarakatuh

And a very good afternoon.

Welcome to the SC-UNDP international conference on Islamic finance.

We are extremely honoured to partner with the United Nations Development Programme. I hope our collaboration will pave the way for more strategic initiatives to advance the sustainable agenda and in particular, the United Nations Sustainable Development Goals (SDGs).

The global economy as we are all aware, is beginning to recover from the economic fallout of the COVID-19 pandemic. However, this recovery, is not felt equally. Poorer countries are dealing with a deeper, longer-lasting economic damage that has increased global poverty and threatens to reverse progress on global goals.

Against this background, we must explore all options to mitigate this impact and support recovery. The Islamic capital market (ICM) can play a crucial role in helping us recover from the pandemic and provide avenues to achieve the SDGs.

In fact, Malaysia, as an established ICM leader, is well-placed to showcase the benefits of bringing together ESG and Shariah.

Both Islamic finance and sustainable and responsible investment, or SRI, share positive principles and values such as social responsibility, inclusiveness, equitable sharing of risks and shared societal benefits, among others. This in essence clearly demonstrate, that ICM products and instruments as a natural fit to support the SDGs, and of course the overall sustainability.

Globally, Islamic finance assets is projected to be US$ 3.7 trillion in 2024¹. Malaysia continues to lead the sukuk market, accounting for roughly 45% of global sukuk outstanding². It is also one of the top three jurisdictions for Islamic funds, accounting for over 29% of total global AUM. As of January 2022, close to half of 44 SRI funds registered domestically were Islamic³. 

As you can see, the ICM accounts for over 60% of Malaysia’s total capital market. On sustainability, we have pioneered the green sukuk and the social impact sukuk through SC’s SRI sukuk framework.

Maqasid al Shariah or the objectives of Shariah emphasise a holistic view of life in Islam which promotes the attainment of benefits and prevention of harm for the people. This encompasses inclusion and facilitating investments for social good which are also integral in the SDGs.

In meeting the SDGs, Maqasid al Shariah should be the foundation for all business transactions and activities. The SC looks forward to participating in more strategic thought-leadership platforms to raise awareness of ICM’s vast potential in meeting the Maqasid al Shariah.

Sukuk for example, has far-reaching effects in achieving both social and green goals. Sukuk issued under the SC’s SRI Sukuk Framework have financed a variety of green, social and sustainable projects, which include quality education, and affordable and clean energy.

Islamic teachings, clearly emphasise sustainability, as a key social agenda. Combined with social finance, it can assist in creating employment, protecting livelihoods, ensuring greater equality and alleviating poverty. Islamic social finance instruments such as Zakat, Sadaqah and Waqf also promote inclusive and sustainable economic growth. 

This is important, as a UNDP study found that less developed economies can outperform pre-COVID trajectories by investing in an ‘SDG Push’⁴.

Malaysia has identified the Waqf segment as an innovative social development tool. Having led the way in facilitating the world’s first Waqf  IPO, the SC launched the Waqf-featured fund framework in 2020. This has undoubtedly broadened the range of innovative ICM products and provided investors access to socially impactful activities.

We, at the SC, have also engaged with the Malaysian government to develop the National Wakaf Master Plan to strengthen Waqf management and further develop Malaysia’s Islamic economy.

Looking ahead, impact investing, is another growth avenue for ICM. By integrating impact assessments with Islamic social finance instruments, investors will be able to measure its payoffs and outcomes. This also aligns with Islam's views on reinvesting profits back into society.

Ladies and Gentlemen,

Another significant megatrend that can influence the pace of economic recovery is greater adoption of technological innovations. I believe the use of financial technology, or fintech, to advance the SDGs will become increasingly important.

This is evident in the rise of the various fintech solutions such as digital investment management, peer-to-peer (P2P) financing and equity crowdfunding (ECF). Today, these fintech solutions are able to offer Shariah-compliant options alongside conventional products.

Last year, the SC and the UN Capital Development Fund launched ‘FIKRA’, FIKRA is an Islamic Fintech Accelerator Programme. The aim is to encourage start-ups with innovative solutions for Malaysia’s ICM. Such collaborative platforms can catalyse novel ICM offerings, as well as enhance accessibility and social finance integration.

I therefore look forward to more intellectual discourse and discussions on how we can connect the dots and achieve greater convergence with the SDGs through Islamic finance.

With that, I wish everyone a good and productive conference over the next two days.

Wabillahi taufiq wal hidayah, Wassalamualaikum Warahmatullahi Wabarakatuh.