Islamic Financial Services

Malaysia’s pioneering role in the development of Islamic finance has made it a clear leader in this field, even as oil-rich Gulf countries show increasing interest in sharia-compliant finance. It is the world’s largest sukuk market – a fact underscored by the record $9.9bn offering by highway operator PLUS in January 2012 – and the second-largest takaful market. The industry has been helped by substantial government support, including low taxes on dividends and several sharia-compliant funds for SMEs and entrepreneurs that are financed by the state. The challenge for the sector moving forward is to standardise and internationalise its products, defining clearly the requirements for sharia products and harmonising its offerings with those of other nations like Qatar.