Malaysia, UK tout Islamic finance to bridge green funding gap

Islamic finance’s framework naturally aligns with social finance, an official said.

Bank Negara Malaysia (BNM) and UK financial stakeholders have met up to discuss opportunities and challenges in promoting green investments via Islamic finance solutions.

Speaking at the MIFC-UK Business Forum, Sultan Nazrin Muizzuddin Shah said that Islamic finance can potentially address global sustainability gaps.

“This is where Islamic finance offers a potential solution. Rooted in principles of ethical practices, fairness, and equitable risk-sharing, it provides a framework that naturally aligns with sustainability and presents diverse funding options, including blended and social finance,” the sultan, who is the Royal Patron of Malaysia’s Islamic Finance initiative, said in his keynote address.

“It is well-positioned to address funding gaps that impede global progress and can serve as a tool for channeling resources where they are needed most,” Shah said to the over 140 participants that attended the forum.

Malaysian and UK representatives agreed to leverage Malaysia’s position as the “global gateway” for Islamic finance opportunities for Asia and the Organisation of Islamic Cooperation (OIC) markets, and the UK’s position as a global financial centre.

BNM and the MIFC Leadership Council (MLC) co-organised the forum with the Islamic Finance Council United Kingdom (UKIFC), TheCityUK, and UK Islamic Finance - Halal Economy Hybrid Group as supporting partners.

Malaysia would need approximately MYR1.2t to MYR1.3t in funding to build a sustainable economic landscape, the BNM said.