Islamic finance must be proactive to reduce poverty, inequality - Sultan Nazrin
Last update: 24/03/2018
KUALA LUMPUR, March 24 (Bernama) -- Islamic finance must remain relevant by being involved more proactively in the global agenda to alleviate poverty and inequality, while maintaining and improving global prosperity and stability, said the Sultan of Perak, Sultan Nazrin Shah.
The substantial similarities between the underlying principles of Islamic finance and those of social and impact investment offered tremendous opportunity for the Islamic capital market, in particular, to capitalise on the strong growth of the broader sustainable finance and investment segment across the globe, he said at the ninth SC-OCIS Roundtable on Islamic Finance held here today.
The forum, themed, 'Enhancing the value of Islamic capital market through social and impact investment', was co-organised by the Securities Commission Malaysia and the Oxford Centre for Islamic Studies.
Sultan Nazrin said the Maqasid al Shariah, often viewed as being the foundation of Islamic finance, should form the basis for structuring a strategic roadmap for the long-term development of the Islamic finance industry.
"This is a roadmap that enables the incorporation of sustainable development issues into capital markets, taking into consideration the challenges of the present, but without compromising the ability of future generations to meet their own needs," he added.
He cited philanthropy as another area of opportunity for combining Islamic finance with social and environmental objectives, and this included the institutions of sadaqah (voluntary charity) and waqf (endowment).
Sultan Nazrin said recent initiatives in this area - the launch of Sadaqa House by Bank Islam Malaysia early this year and last year's public offering of waqf shares in the redevelopment of Larkin Sentral - augured well for the prospects of Islamic social finance.
He said through these initiatives, they had in place the necessary governance features to gain the public's trust and confidence.
"This is crucial for attracting broad stakeholder participation and ensuring the sustainability of the initiatives."
"Given the extent of waqf assets available in different parts of the world, and especially in Muslim-majority countries, there is significant potential for waqf in particular to support or even drive the development of Islamic social finance, not just in Malaysia but also globally," Sultan Nazrin added.