SC Urges Islamic Finance Stakeholders to Collaborate for Future of Islamic Fintech

KUALA LUMPUR, Sept 5 (Bernama) -- The Securities Commission Malaysia (SC) has urged stakeholders in Islamic finance to collaborate and lay the groundwork for the future of Islamic fintech.

Chairman Datuk Mohammad Faiz Azmi emphasised the need for the industry to rethink its branding approach, suggesting that focusing on the ethical values within the Maqasid al-Shariah principles could resonate with a broader audience.

“This shift, we believe, will allow Islamic finance to appeal to a wider demographic without compromising its core values,” he said in his opening remarks during the FIKRAtech Roundtable on Wednesday.

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Mohammad Faiz highlighted the SC’s effort to foster an environment that encourages innovation,  enabling entrepreneurs to access market-based financing for start-ups and early-stage companies.

Since 2015, he noted the SC has introduced several initiatives, such as the Guidelines on Recognised Markets, and various platforms for industry discussions, including Fintech Roundtables and dialogues with key players.

Mohammad Faiz said Malaysia was the first in the ASEAN region to introduce a framework for equity crowdfunding (ECF) in 2015, starting with just six players.

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He said the sector has since grown significantly with over 40 players across various fintech verticals, including peer-to-peer financing (P2P financing), digital asset exchanges, and initial exchange offering platforms. 

While Islamic solution providers still represent a small segment of the crowdfunding ecosystem, Mohammad Faiz said their presence is growing.

He said that the SC aimed to cultivate a robust digital landscape by offering a balanced regulatory framework that supports innovation while maintaining market integrity.

“We can see that these efforts are paying off. In Malaysia, ECF and P2P platforms have raised more than US$262 million (RM1.24 billion)  for Shariah-compliant projects over the past seven years,” he noted.

Mohammad Faiz said the numbers have grown exponentially from 2022 to 2023, with Islamic ECF/P2P solutions in Malaysia currently contributing at least 24 per cent of total alternative funding, compared to only eight per cent in 2022.

“Overall, both Islamic and non-Islamic ECF and P2P have raised around US$1.7 billion (RM8 billion), supporting over 18,000 micro, small and medium enterprises,” he added.

-- BERNAMA