Last updated: 17 Jun 2024 12:00 Posted in:
A new report has identified opportunities presented by Islamic finance, highlighting practical examples of its usage from Malaysia, and outlining ways in can help in the achievement of Sustainable Development Goals (SDGs).
The report, ‘Unleashing the Potential of Islamic Finance: Global Perspectives on Achieving the SDGs with Islamic Finance Tools & Concepts’, was published by the International Federation of Accountants, the Malaysian Institute of Accountants (MIA) and the World Bank.
The report was released at the Innovation in Sustainable Development: Islamic Finance Paving the Way forum, hosted by MIA in Kuala Lumpur.
In a statement IFAC said: “In recent years, addressing the Sustainable Development Goals (SDGs) has become increasingly challenging. The worldwide economic downturn resulting from the COVID-19 pandemic has worsened the already significant $4.2 trillion funding gap to achieve the SDGs. “As countries worldwide strive to finance the ambitious scope and scale of the SDGs, they also face the complex task of serving financially underserved communities. Advancing Islamic finance has the potential not only to serve usually underbanked Muslim communities but has broader application considering its synergies with the SDGs.”
It said a major tenet of Islamic finance is the protection of people, planet and prosperity, and its underpinnings can contribute to fresh thinking on sustainable development paradigms, interpretations, and approaches. The SDGs create opportunities for Islamic finance growth, just as Islamic finance can drive greater sustainable development.
MIA said that Malaysia has become a pioneer of Islamic finance, attributable in part to its strong governance, supportive regulatory ecosystem, and its own role in professional accountancy organization and education.
“Professional accountancy organizations are playing a key role in advancing sustainable financing, and given the profession’s commitment to support the SDGs, principles of Islamic finance should be considered a viable approach,” said Asmâa Resmouki, IFAC President. “We encourage all IFAC members to look towards best practices such as those cultivated in Malaysia, and seize opportunities presented in their own jurisdictions.”
DOWNLOAD FULL REPORT“Professional accountancy organizations are playing a key role in advancing sustainable financing, and given the profession’s commitment to support the SDGs, principles of Islamic finance should be considered a viable approach."
Asmâa Resmouki, IFAC President