Publication: Islamic Finance and the Development of Malaysia’s Halal Economy
Date
2022-10
ISSN
Published
2022-10
Author(s)
World Bank Group
Abstract
The halal economy (HE) plays an
important role in Malaysia’s economic growth, contributing
7.5 percent to the Gross Domestic Product (GDP) as of 2020.
Under the Twelfth Malaysia Plan, 2021-2025 (12MP), one of
the key strategies to boost Malaysia’s economic growth is
enhancing the competitiveness of the halal industry to
capture a more significant share of the global halal market.
The term halal refers to anything that is permissible or
lawful under Islamic Law that dictates the way of life of a
Muslim (a follower of the Islamic faith). Hence, the scope
of the HE is broad and can be defined as an industry that is
involved in the provision of halal products and services,
including food, clothing and fashion, cosmetics and personal
care, travel, and financial services. Consequently, Islamic
finance is both parts of the broader HE (Hassan et al.,
2021) and can facilitate the development of the HE. This
report requested by Bank Negara Malaysia (BNM) explores the
role of Islamic finance in supporting the development of
Malaysia’s HE with the objective of informing policy
discourse on enhancing existing strategies to increase
access to Islamic finance solutions to underserved HE
enterprises. The report comprises the following chapters,
(1) the current state of the HE; (2) the financing ecosystem
of Malaysia’s HE, (3) enhancing role of Islamic finance for
the HE in Malaysia; and concludes in Chapter 4 with a set of
recommendations for stakeholders in Malaysia. While the
recommendations focus on Malaysia, they may also be relevant
for other developing economies where the HE and Islamic
finance are prominen
Citation
“World Bank Group. 2022. Islamic Finance and the Development of Malaysia’s Halal Economy. The Malaysia Development Experience Series;. © World Bank, Washington, DC. http://hdl.handle.net/10986/38043 License: CC BY 3.0 IGO.”