EPICENTRE June 2025: Malaysia deepens global engagement to advance Islamic finance and spotlighting the industry’s social finance progress - The Malaysia International Islamic Financial Centre (MIFC)

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EPICENTRE June 2025: Malaysia deepens global engagement to advance Islamic finance and spotlighting the industry’s social finance progress

Malaysia deepens global engagement to advance Islamic finance and spotlighting the industry’s social finance progress

Malaysia has been actively deepening its international partnerships, with Islamic finance emerging as a key focus. These collaborations span critical areas including strengthening trade relations, advancing Islamic fintech solutions, supporting capacity building initiatives and unlocking new investment opportunities. A key pillar of this progress lies in the country’s growing emphasis on social finance, which aims to bridge financial inclusion gaps and support underserved communities through instruments like zakat, waqf, and impact-based financing.

In line with this, a recent milestone was the publication of the World Bank’s comprehensive review of iTEKAD, a social finance programme introduced by Bank Negara Malaysia in 2020. The report highlights key findings aimed at strengthening participant selection, enhancing training interventions, and improving monitoring and evaluation methods. It concludes with actionable recommendations for stakeholders to further enhance the implementation and impact of iTEKAD moving forward. Download the report in the link below for more information.

Globally, more countries are advancing their Islamic finance sector through new strategies, regulatory reforms, and market-driven initiatives. These efforts highlight the growing recognition of Islamic finance as a tool for economic diversification, financial resilience and sustainable development across regions.

The MIFC Team

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Malaysia intensifies international collaboration and continues in building local strength and progression

Malaysia

Takaful Malaysia poised for stronger performance

Malaysia’s takaful industry is showing promising signs of evolution, with players like Takaful Malaysia shifting toward more agile and profitable product strategies. The move to shorter-tenure Credit Takaful offerings, especially in personal financing, reflects a broader trend of aligning takaful products with market demand and faster profit realization. Despite headwinds like medical inflation, the industry is adapting through selective underwriting and pricing adjustments, signaling a maturing sector focused on sustainability and growth. These developments highlight Malaysia’s ongoing efforts to strengthen its Islamic insurance ecosystem as part of its wider Islamic finance leadership.

Anwar: Islamic economics must prioritise governance, real-world impact

Malaysia continues to advance its leadership in Islamic finance by emphasizing the need for the sector to go beyond traditional compliance and focus on governance, policy clarity, and tangible socioeconomic impact. Recent developments highlight a growing call for Islamic economics to address real-world challenges such as corruption, wealth inequality, and the integration of emerging technologies like AI and green energy. This evolving approach reflects Malaysia’s ambition to shape a more just, inclusive, and future-ready Islamic economic model that resonates globally.

Government allocates RM35 million to strengthen waqf initiatives

The Malaysian government allocated RM35 million to strengthen the country’s waqf ecosystem, marking a significant step in advancing Islamic social finance. The initiative also strengthens education-based waqf through the MyWaqaf-PTPTN programme, helping underprivileged students access higher education which aligns with the broader goals of inclusive growth, poverty alleviation and sustainable finance. This reflects Malaysia’s ambition to position waqf not just as charity, but as a dynamic tool for economic empowerment and social equity.

ASEAN

Malaysia looks to help standardize the halal economy as Southeast Asia and the Middle East build new ‘smart partnerships’

Malaysia is accelerating its leadership in the Islamic economy through strategic regional and global collaborations. A key initiative is the proposal for a unified ASEAN halal certification logo, aimed at harmonizing standards across member countries to boost global recognition and market access for halal products. This effort reflects Malaysia’s commitment to expanding the halal industry and integrating it with Islamic finance, ensuring that ethical and Shariah-compliant principles guide trade and investment. The collaboration with Gulf Cooperation Council (GCC) nations further strengthens Malaysia’s position, fostering joint development in halal certification, Islamic banking, and fintech. These moves not only enhance Malaysia’s role as a global Islamic finance hub but also support inclusive and sustainable economic growth across the region.

Europe

Tatarstan keen to adopt Malaysia's Islamic finance framework

Tatarstan is keen to collaborate with Malaysia to adopt its well-established Islamic finance framework, aiming to strengthen Shariah-compliant financial services in Russia. The republic sees Malaysia as a global leader in Islamic banking and is exploring strategic partnerships to position Tatarstan as a pioneering hub for Islamic finance in the region. This collaboration reflects a shared commitment to expanding expertise to develop robust Shariah compliant banking and economic system.

Global Islamic finance progress and outlook

Central Asia

Pilot project bank in Kyrgyzstan secures official license as full-fledged Islamic bank

The National Bank of the Kyrgyz Republic (NBK) has officially granted EcoIslamicBank a full banking license, allowing it to operate as a fully-fledged Islamic bank after nearly 20 years as a pilot project. This landmark approval enables the bank to offer Shariah-compliant financial services in both local and foreign currencies, marking a major advancement for Islamic finance in Central Asia and reflecting NBK’s commitment to supporting ethical and inclusive financial systems.

Central Asia

Malaysia, Kyrgyz Republic to collaborate in Islamic Banking and Halal Sectors

Malaysia is set to assist the Kyrgyz Republic in developing its Islamic banking sector, following a bilateral meeting between Prime Minister Anwar Ibrahim and President Sadyr Zhaparov. Malaysia offered its expertise in establishing Islamic financial systems, aiming to help Kyrgyzstan build a robust framework aligned with Shariah principles. This collaboration marks a strategic move to expand Malaysia’s influence in Islamic finance globally, while supporting Kyrgyzstan’s efforts to diversify its financial infrastructure.

Malaysia has strong potential to expand in Central Asia with Uzbekistan as gateway

Malaysia is strengthening its Islamic finance leadership through a strategic partnership with Uzbekistan, focusing on expanding Sukuk development and Shariah-compliant financial services. During a recent visit, Deputy Prime Minister Datuk Seri Fadillah Yusof emphasized Malaysia’s commitment to sharing its expertise in Islamic capital markets, positioning Uzbekistan as a key regional partner. The collaboration also includes initiatives in halal trade, carbon trading, and water security, with plans for direct flights and technical training to support broader economic integration. This partnership reflects Malaysia’s vision to drive Islamic finance growth across Central Asia.

GCC

UAE approves the National Strategy for Islamic Finance and the Halal Industry

The UAE Cabinet has approved the National Strategy for Islamic Finance and the Halal Industry, aiming to strengthen the UAE’s position as a global leader in these fields. The strategy targets increasing the assets of Islamic banks from AED 986 billion to AED 2.56 trillion within six years and raising the value of Islamic sukuk issuances listed in the UAE to over AED 660 billion by 2031. A committee chaired by the Central Bank Governor will oversee the implementation, reflecting the UAE's commitment to economic diversification and leadership in the halal sector

Europe

Turkiye-Malaysia Islamic Finance Forum Marks New Era of Strategic Cooperation

The Türkiye–Malaysia Islamic Finance Forum 2025, held in Istanbul, marked a pivotal moment in strengthening bilateral ties through Islamic finance. Organized by Türkiye’s Investment and Finance Office and Malaysia’s MIFC Leadership Council, the event brought together key figures from both nations to explore collaboration in takaful, Islamic banking, capital markets, and talent development. It also laid the groundwork for deeper strategic cooperation, emphasizing regulatory harmonization, institutional partnerships, and joint ventures aimed at positioning Türkiye and Malaysia as leading hubs in the global Islamic finance ecosystem.

Turkiye to issue US dollar Sukuk

Turkiye is advancing its Islamic finance agenda with plans to issue a US dollar-denominated Sukuk, maturing in September 2030. This move reflects Turkiye’s commitment to diversifying its funding sources through Shariah-compliant instruments and signals growing global interest in sovereign Sukuk as a stable and ethical investment vehicle. It also contributes to the broader momentum of Islamic finance expansion across emerging and developed markets.

Pru Life UK launches Islamic product, first Shariah-compliant life protection product in the Philippines

Pru Life UK has launched PRUTerm Lindungi, its first Shariah-compliant life protection product in the Philippines, marking a key advancement in the region’s Islamic finance landscape. This development reflects rising demand for values-driven financial solutions, and supports the broader expansion of Islamic finance beyond banking, particularly in the Takaful (Islamic insurance) sector across Southeast Asia.

Islamic Finance Dashboard

Upcoming events highlight

Global Islamic Finance Forum 2025

Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), with the support from Bank Negara Malaysia (BNM), is proud to host the 8th Global Islamic Finance Forum (GIFF) 2025 from 13 to 15 October 2025 in Kuala Lumpur, Malaysia. Together, let’s shape the future of Islamic finance.

MIFC Global Impact Challenge

The Malaysia International Islamic Financial Centre (MIFC) Global Impact Challenge 2025 invites changemakers from around the world to submit impact-driven financial solutions that strengthen social resilience and address climate challenges. Applications are now open until 18 August 2025. For more info and to register, visit mifclc.com/mgic. #MIFCImpactChallenge

Apply Now

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