Muhammad bin Ibrahim: “Islamic finance can prove beneficial for SMEs”
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The Deputy Governor of the Central Bank of Malaysia was in Mauritius recently for the 11th Islamic Financial Services Board Summit. He shares his views on the steps Mauritius needs to take in order to rise up to the challenge of becoming an Islamic financial services hub.
BUSINESSMAG. How do you take stock of the 11th IFSB Summit which was held in Mauritius?
My delegation is first of all very glad to be present here. The Prime Minister’s speech was very encouraging for the development of Islamic finance on the island. Similarly, the Governor has given the assurance to make Islamic finance work. All these commitments bode well for the Islamic finance services industry at large.
BUSINESSMAG. What were the important decisions taken at the summit?
One of the issues that were discussed quite lengthily was the initiatives we can take for Africa. We looked at the various steps that can be taken by new and emerging Islamic financial jurisdictions to further propel the industry.
Quite a few things caught my mind, such as the use of Islamic finance to promote financial inclusion. It can in fact be used to expand the reach of the underserved segment of society and promote financial services among them. This effort will be very good for the future of these economies.
When you look at the development of Islamic financial services industry in Malaysia, you notice that the support of the Government and the Central Bank has been a very critical factor.
In Mauritius too, the PM and the Central Bank Governor have given their support, and this augurs well for the industry to face the challenge. Islamic finance is an alternative for the public, the banking system and the economy at large. It promotes competition, brings about the creation of more innovative products and services and provides additional options to customers to pick and choose among financial products.
BUSINESSMAG. How does Malaysia intend to tap into the potential Mauritius repre-sents as a budding hub for Islamic finance?
Malaysia is keen on sharing its experience in the Islamic finance field, especially with regards to the regulatory framework, given that we have numerous years of expe-rience. Mauritius can thus learn from what has been developed in Malaysia over the last few years. This provides you with an opportunity to quickly jump and kick start development. Islamic finance can also prove very beneficial for the development of Small and Medium Enterprises.
The SME market is in need of credit, which often it does not have access to, thus making it an undertapped market. Islamic finance can help guarantee part of their credit needs...
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