LONDON, Sept 11 – Islamic finance has the potential to bridge the critical funding gap needed for the transition to a more sustainable and resilient future, said Sultan of Perak, Sultan Nazrin Shah.
Sultan Nazrin Shah, who is also the Royal Patron of Malaysia’s Islamic Finance Initiative, said Islamic finance, rooted in ethical practices, fairness, and equitable risk-sharing, provides a framework aligned with sustainability and presents diverse funding options, including blended and social finance.
“It (Islamic finance) is well-positioned to address funding gaps that impede global progress and can serve as a tool for channelling resources where they are needed most,” the Perak Ruler said in his keynote address at the Malaysia International Islamic Financial Centre (MIFC)-United Kingdom (UK) Business Forum 2024.
Citing the latest United Nations (UN) Sustainable Development Goals (SDG) report, he said that the UN estimated that nearly US$4 trillion of annual inflow is needed to achieve the 2030 Agenda for Sustainable Development in developing countries and US$9.2 trillion in annual average spending on physical assets is required to achieve net-zero emissions by 2050.
While highlighting Malaysia as a regional leader in Islamic finance with total outstanding Sustainable and Responsible Investment (SRI) sukuk issuances exceeding US$6 billion, Sultan Nazrin was also pleased to to note that the UK is one of the few countries outside the Organisation of Islamic Cooperation to have also issued sovereign sukuk twice.
The Perak Ruler said that slamic finance has the potential to be a trailblazer in the area of innovation and technology, with the Islamic fintech industry being worth US$79 billion in 2021 and projected to grow at a remarkable rate to US$179 billion by 2026.
