Malaysia has established itself as
one of the world’s leading centres for Islamic
finance. With growth in the sector now outstripping that of
conventional finance, Malaysia could be on the brink of
establishing its pre-eminence.
Cheah King Yoong, a Kuala
Lumpur-based vice-president of equity research at Alliance
Research, says Islamic banking in Malaysia registered a
compound growth rate of 23% between 2008 and 2011, far
exceeding the 11.4% growth rate of total loans in the Malaysian
banking system. In the first seven months of 2011,
Malaysia’s Islamic banking assets rose by 15% to
reach M$389 billion ($126 billion).
In the bond market,
two-thirds of global outstanding sukuk issuance, $165 billion,
has been issued in Malaysia. As a result, many experts are
lauding Malaysia as the
global hub of Shariah-compliant financing.
And its burgeoning popularity is not based solely on
religion. "People choose Islamic...