Efforts to set up a national Islamic fintech taskforce in Malaysia are underway, with its mandate set and several institutions showing initial positive responses, IFN Fintech has learned.
Malaysia Digital Economy Corporation (MDEC), the government agency driving the establishment of this coordination platform, has had several meetings with two ministries — the Ministry of Finance and the Ministry of Communications and Multimedia — as well as the private sector and Islamic religious institutions about forming a dedicated taskforce to drive the Islamic fintech agenda. It has been decided that the taskforce will focus on enhancing financial inclusion of the Malaysian people through Islamic fintech.
The taskforce proposal was mooted during the first national Islamic Fintech Dialogue, coordinated by IFN and supported by MDEC, in November 2019. The responses so far, MDEC says, have been positive including from Islamic religious institutions.
As the nation recovers from the economic impact of its Movement Control Order, which many has hailed as one of the most successful globally in keeping the spread of COVID-19 under control, momentum to implement the strategies formulated from the two Islamic Fintech Dialogues are picking up. Among them are the launch of the Fintech Booster, a capacity-building program, earlier this month and e-Berkat, a digital finance inclusivity awareness initiative targeted at the B40 (the bottom 40% of income earners) and MSMEs. These two correspond with the recommended strategic priorities identified during the dialogues including developing the capacity of fintech companies, establishing a mechanism to minimize regulatory uncertainties as well as enhancing digital and Islamic financial literacy.
Covering both Islamic and conventional fintech, these two programs have garnered significant Islamic interest. Within the first week of its launch, Fintech Booster had attracted over 150 fintech companies. It is learned that about 40% of enquiries and participation have Islamic fintech leanings.
“This is very encouraging as we are pushing for Islamic fintech and creating differentiation for Malaysia in the fintech space,” Norhizam Kadir, the vice-president of fintech and the Islamic digital economy at MDEC, shares with IFN. The Fintech Booster program has partnered with two Shariah consultancy firms to develop Shariah-focused modules.
MDEC is also making headway at creating meaningful engagement with Islamic institutions, another priority area determined by industry stakeholders during the dialogues.
“We are speaking to several bodies right now with the hope that we will see some great opportunities for collaboration,” Norhizam tells IFN. “I’m very positive to see Zakat and Waqf bodies opening up to us and agreeing to run some quick wins as well as [digital] POCs [proof of concepts] to increase efficiencies for distribution, validation as well as upskilling of recipients.”To download the reports on the first and second Islamic Fintech Dialogues, click here.