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Recommendations to Support the Development of Islamic Trade Finance in…
Recommendations to Support the Development of Islamic Trade Finance in Malaysia
5.2 Awareness and promotion
Should leverage various international platforms to
increase awareness about Malaysia’s ITF ecosystem
Transacting with Shari’ah-compliant products
Help clarify the perception of risk that international banks may have in relation to Malaysia’s IFIs
Malaysia’s ITF co-exists with conventional trade finance, complies with the same global standards related to financial crimes, tax transparency and prudential regulation
Should have closer engagement with MDBs
Accord new opportunities for Malaysian IFIs to expand their international presence and leadership in ITF
Enable cross border trade risk mitigation to be improved
Allow IFIs to support Malaysian SMEs in expanding their businesses to overseas markets
5.1 Robust regulatory and policy support
A more comprehensive strategy across key stakeholders and sectors
Helped to identify the issues that are inhibiting the growth of ITF
Increase awareness and understanding of the
issues
Facilitate buy-in of the proposed solutions
Nurturing SMEs with ITF
.Enabling the continued development of SMEs with ITF to provide greater access to international markets,
Increase its utilization
A single window for ITF.
Leveraging an existing similar platform for
ITF can provide real-time data and reliable information
Offer the business enterprises more options with a
competitive rate
Push for IFIs to improve their products and services to be in line with the latest market
developments.
The Government should leverage its leadership in the Halal sector
The Government should actively engage with its counterparts, especially in the OIC region and countries
The Government could also explore proposals to leverage on the existing ASEAN SWS
Advance initiatives promoting the utilization of ITF solutions for trade within the ASEAN region.
Consider the allocation of funds from the Government of Malaysia
The government should introduce a subsidized
program for ITF
The government could set targets for IFIs to achieve
Especially for banks that provide Islamic and conventional trade finance facilities
Encouraging listed companies to
qualify as shari’ah-compliant
5.4 Digitization and Islamic FinTech
Digital trade financing platforms
Becoming more transparent with the growth of fintech and digital Islamic trade platforms
Islamic supply chain finance
Where banks automate document processing across the entire supply chain
Benefits:
The real-time analysis of financial documents
The elimination of associated banking transaction fees and specifications
5.3 Strong institutional enables
Islamic institutions including professionals and academics
to mitigate Shari’ah challenges
To develop innovative and flexible Shari’ah-compliant
equity-based trade finance tools
moving away from dependence on traditional debt based structures
Talent development and capacity building in ITF
Relevant industry associations
AIBIM and the ICC chapter in Malaysia should take more proactive action to improve dialogue on ITF domestically and globally