Key thrusts to develop Malaysia as an Islamic Financial Hub

Malaysia is a small country. With just over 26 million people and categorized as a “developing” nation, we must get our strategy correct as we may not be given the chance to start over if we miss the boat. After being involved in this industry for the last 19 years, in my humble opinion, these are the comparative advantage that we need to leverage on.

Impressive Human Capital

Without doubt, Malaysia has produced some of the best minds in Islamic finance. The experienced gained from the very vibrant Islamic finance market within Malaysia has been instrumental in building the skill sets as well as interest in the industry. In this context, I am referring to the professional human capital and not just the management class. Financial engineering, risk management, Syariah and legal are key components for a successful Islamic finance market and Malaysians are at the forefront in all these fields. In fact, Malaysia has been exported experts on these fields all over the world.

Vibrant Capital Raising Conduits

Malaysia has many capital raising conduits for Islamic Finance. From multinationals all the way down to the individual consumer, the ability to raise financing is very easy in Malaysia. The Sukuk market is very active and the numerous Islamic banks also help in the reallocation of capital to those that need them. The various options available to get capital are an important component that has helped the country to grow.

Ample Liquidity to Meet Demand

Malaysia has ample liquidity due to the high saving nature of the populace. Demand for capital has been met by overwhelming response by investors. The availability of numerous Islamic financial institutions that are able to aggregate savings makes Malaysia as a favorite destination to issue capital. Many multinationals have done so via the Sukuk market.

Transparent Legal and Regulatory Regime

The laws and regulatory regimes in Malaysia are second to none. The symbiotic existence of the Islamic finance laws with the English Common law makes Malaysia a very safe destination for all stakeholders as their rights are easily known and any disputes can be litigated using transparent rules.

Free Flow of Information

It is easy for financial information to be obtained in Malaysia. From trading data up to legal documents, users can easy access it. Everyone can make an informed decision based on the information available. Compared to other countries in the world, Malaysia is one of the top in terms of getting financial information.


We only need to focus on this four items and we can place Malaysia on the map.