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Malaysia’s Rapid Growth in the Islamic Digital Economy: A Promising Opportunity for Investors
Malaysia is rapidly expanding its presence in the Islamic Digital Economy (IDE), thanks to the growth of technology firms serving the digitalisation of the Islamic finance, Halal, and Lifestyle sectors. Despite the pandemic, businesses and organisations worldwide have shown incredible resilience, and a pivot towards digital adoption was inevitable. The Malaysian government has recognised the potential for the IDE to serve as a vehicle for economic growth and a source of new revenue in the country. The government has leveraged technologies such as artificial intelligence, the internet of things (IoT), fintech, and blockchain to support the sector. Malaysia’s multicultural, multilingual, digitally skilled talent pool, state-of-the-art infrastructure, robust policies and guidelines, and mature investment ecosystem were building blocks that contributed towards its number one global ranking in Islamic Finance and Islamic Fintech.
The government’s sole digital economy driver, the Malaysia Digital Economy Corporation (MDEC) identified the IDE as a Promoted Sector under its Malaysia Digital initiative. Backed by 25 years of success stories, MDEC has been proactively supporting a sustainable supply of startups that have fed the burgeoning demand for digitalisation from financial institutions, government agencies, cooperatives, and the private sector.
Malaysia is currently ranked first in the overall Global Islamic Economic Indicator ranking with respect to Islamic finance, halal food, Muslim-friendly travel, and media and recreation. Improving the competitiveness of the Halal industry is one of the key strategies for boosting economic growth. The Halal economy is dominated by the food services sector, with revenue forecast to reach $47.6bn by 2025. One of the companies driving the IDE agenda forward in Malaysia is Sinisana, a traceability solutions provider from Sarawak, a state in East Malaysia. It caters to companies that intend to allay consumer fears about the Halal nature of the beef they purchase, among others.
Malaysia’s IDE could further be bolstered in developing the Halal economy by supporting the adoption of digital payments, integrating Halal advisory and marketplaces, and improving current offerings through innovative solutions such as fintech, blended finance, alternative finance, and Islamic social and ethical finance. Wahed Malaysia, a web-based Shariah investment platform under Wahed which is headquartered in the US, launched in Malaysia in 2019. The platform offers automated investment portfolios to retail investors, with a minimum investment of MYR100 ($24).
MDEC has been instrumental in connecting local and international investors with promising startups in the IDE. Their programs and initiatives lower the barrier of entry for digital economy companies to obtain support and gain exposure in the market. Their specific IDE division has also been extremely supportive of the growth of businesses, linking industries to tech startups. MDEC’s efforts to grow Malaysia’s IDE are expected to continue to help put Malaysia on the world stage as a leading player in the global Islamic digital economy.
Read further here: https://gulfbusiness.com/at-the-forefront-of-islamic-digital-economy/
