Mideast ‘can emulate’ Malaysia Islamic finance framework
There is a great deal that countries in the Middle East can do to emulate the Malaysian regulatory framework particularly in Islamic financing solutions for green technology, an expert in corporate finance said.
Deloitte Corporate Finance Ltd, United Arab Emirates, assistant director Goutam Palukuri said that many Malaysian companies are financing their green technology initiatives through Islamic banks and this is only because there is a commitment on the part of the authorities here to put a sound foundation in the regulatory framework coupled with providing the right incentives.
“Many in the Middle East can emulate what they see in Malaysia as Middle Easterners would prefer to finance green technology projects that are Shariah-compliant,“ he told The Malaysian Reserve in an interview.
He said that financing of green technology through Islamic banks in the Middle East is still at a nascent stage but Malaysia’s progress in the sector could be emulated.
“The process of putting in place a tangible policy framework and incentives and motivation like that given by the Malaysian authorities can spur green financial industry in the Middle East further,” Palukuri said.
The idea of “exporting” Malaysia’s success in Islamic finance and banking sectors has been floating around for some time now.
The need for foreign nations to learn from Malaysia in Islamic finance was also expressed by Greg Clark, financial secretary to the Treasury of the UK during his recent visit to Malaysia.
Green Technology Financing Scheme (GFTS) is an initiative by the government to promote investments in green technology, a sector that is envisaged to be the emerging drivers of economic growth of our country.
It is a national initiative aimed at achieving a sustainable environment. The participating financial institutions’ role is critical in ensuring success of GFTS, which entails the financing of companies that supply and utilise green technology.
Asked to comment on Islamic financing in Malaysia , particularly green financing, Palukuri said that Islamic financing in Malaysia has really “taken off” and green growth financing would spur fur ther development of Islamic banking in Malaysia .
Palukuri said that such a financing mechanism based on Islamic principles to fund the development of green technology to protect the environment would appeal to the Islamic world and catapult the green technology sector further.
Islamic Banking and Finance Institute of Malaysia, (IBFIM) said that the event Discover Green Technology Industry in Malaysia current and future prospects of “Islamic Financing Solutions” is to leverage on the Islamic financial systems in Malaysia to boost economic development.
Islamic finance for green technology is a positive initiative to match Islamic risk capital with financing opportunities in the emerging green technology sector and to accelerate the use of Islamic finance globally and maximise economic yields.
The entire aim of promoting finance for green technology is to promote socioeconomic growth in developing economies, IBFIM said. IBFIM is one of the co-sponsors of the “Discover Green Technology Industry in Malaysia” alongside with Green Technology Corp or GreenTech Malaysia.