by Aida Lim Abdullah, CEO of Penang Halal International Sdn Bhd, A State Govt Owned Entity

(CGMA, CIMA, CA, CFP, CSI, BA (Hons) Accounting & Finance (major in law))

Within approximately 45 years, the Global Modern Islamic finance has grown to an asset size of about USD2.5 trillion as reported in 2018, represented by almost 1,500 institutions worldwide (Islamic Finance Development Report 2019), whereas, “The Economic Outlook 2021” report published by the Ministry of Finance (MoF), Malaysia, shows that the Islamic banking industry in Malaysia has a total asset valued at RM1.03 billion and the total outstanding Islamic financing is about RM787.8 billion. 

Islamic Financing is not only for the Muslims.  It is a fast-moving industry, alongside the development of Syariah and Halal business activities.  The Islamic financial system operates with the principles of Shariah law where elements such as usury (riba), ambiguity (gharar) and speculation (maisir) are prohibited.  In this regard, Bank Negara Malaysia (BNM) and the Securities Commission (SC) have prescribed approved Shariah principles that apply to banking, insurance and capital market products in Malaysia; for example:- mudharabah (profit-sharing), murabahah (cost-plus sale) and tawarruq (tripartite sale). 


The fallout from the Covid-19 pandemic and its effects on the world’s economy surpassed that of the global financial crisis in 2008.  The unprecedented Covid-19 crisis created severe uncertainty and struck a dire blow on global economy and international trade.  The negative economic and human impact with far-reaching implications on consumer, corporate, and global trade finance dynamics swept around the globe with lightning speed.

Nevertheless, based on the MoF report, it is expected that Malaysia’s Islamic finance industry is likely to expand further with the continuous promotion of Shariah-compliant products.  As the financial industry and business environment evolves, there are more Shariah-compliant products introduced and are available in the local market for Muslim and non-Muslim investors and businesses.

The Covid-19 pandemic has also created awareness on the use of financial technology offerings in the area of Islamic finance such as Shariah-compliant digital assets, crowdfunding and peer-to-peer financing platforms with a suite of e-Commerce set-ups that offers Halal goods, like those initiated by Penang Halal International with its partners namely, Penang E-Mall@Shopee, Foodpanda, Food4U programme and Penang E-Bazaar@PGMall.

Globally, we are seeing some countries downsizing or even shutting down certain industries and sectors; the economic hardships observed have amplified and spilled over to all.  Those who can work from home mostly have stable incomes, but non-permanent or daily workers are at risk of losing their earnings, particularly in the most affected industries such as property, construction, tourism and service industry.  


One of the important wake-up calls in this pandemic is that many now realise the importance of embracing ethical and hygienic lifestyles, especially in the food chain process from manufacturing, processing to consumption.  As such, it would seem that the Islamic Finance will continue to develop and grow upwards alongside with Syariah, Halalan Toyyiban lifestyle, be it for religion or just an individual choice for ethical and hygienic lifestyle.  There appears to be a bright future for Islamic Finance and Businesses moving forward.