Country Economic Work for Malaysia - Islamic Development Bank

Issues/Challenges Facing the Islamic Finance in Malaysia
137. Despite the fact that Islamic finance industry is quite well-developed in Malaysia, it
faces key issues and challenges which if addressed can further unlock the industry’s potential
to contribute significantly more to national and international development of Islamic finance.
Key challenges facing the Islamic banking are as follows:
Awareness: There remains the need to enhance awareness about the commercial values of
Islamic finance instruments amongst retail and corporate customers and the growing usage of
Islamic finance has transcend beyond Muslims customers.
Standardization and Harmonization: There is further need to promote standardisation of
documentations globally in supporting the Islamic finance cross-border business from
Malaysia.
Product Innovation: There is an opportunity to foster product innovation with distinctive
features in order to open up new and enterprising avenues through Islamic finance.
Talent and Research Development: There is an on-going need to cater for the talent demand
of the industry in particular in enlarging the pool of talent that is both Shariah and finance
conversant. Research on under-explored areas need to be intensified further e.g. Islamic
venture capital.
Waqf Opportunities: The concept of Waqf as a tool of utilizing Shariah-compliant financing
for development and poverty alleviation remains under-utilized in Malaysia. This area
requires special attention from the concerned authorities and viable projects can be identified.
(ii) Collaboration with Malaysia Science Academy 26
Overview of Science and Technology in Malaysia
138. The Science and Technology related activities have been essentially Reverse
Linkage exercises for which knowledge and expertise are shared by the Malaysian
entities for the benefit of other IDB member countries involved. In this regard, Malaysian
Industry-Government Group for High Technology (MIGHT) has launched 3 new initiatives;
(i) the Malaysian Biomass Initiative (MBI); (ii) the SMART Community Initiative (SMI); and
(iii) Human Capital Building Initiative (HCBI). The aim of these initiatives is to utilize the
Information and Communication Technology (ICT) and new scientific discoveries to enhance
the quality of life in Malaysia and the other IDB MCs and Non-MCs. In this regard, Malaysia
Science Academy continues to play a key role in S&T development.
Malaysia Science Academy
139. The Malaysia Science Academy was established in 1995 and is funded by the
Government of Malaysia. The main objectives of the Academy are the following:
26 Sources: Malaysia Science Academy, Annual Report (2010); Ministry of Higher Education; Ministry of Science,
Technology and Innovation; and Malaysia Institute of High Technology Industry (MIGHT)
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