PUTRAJAYA, Nov 5 — Deputy Prime Minister Datuk Seri Dr. Wan Azizah Wan Ismail said the shortage of available financing for halal start-ups and small and medium enterprises (SME) is a “glaring” deficiency in Islamic finance in Malaysia.
She said Bank Negara Malaysia’s Financial Stability and Payment Systems Report revealed that Islamic business financing continues to exhibit strong growth at 12.5 percent.
“However, most of the Shariah-compliant SMEs are facing difficulties in seeking SME-suitable Islamic financing,” Dr. Wan Azizah said in her speech during the Halal Inclusion Roundtable and Masterclass at the Putrajaya International Convention Centre.
Due to this, the deputy prime minister said most Malaysian SME producers of halal products are unable to fully take advantage of the global demand and supply of the halal market.
“In that respect, more concerted effort and attention should be focused on SMEs, since they are key drivers in creating new jobs and innovation in Malaysia’s halal sector.
“With better financing, I believe more industry players will be encouraged to expand their product lines to include halal-certified products,” she said.
Dr. Wan Azizah said better financing will also give existing players a clearer direction for developing strategies in remaining competitive, as well as to meet the various challenges posed by the advent of globalization, technology, and trade liberalization.
“Local manufacturers may be able to increase the research and development content of their products to add higher value.
“One should be reminded that merely relying on the Halal label alone may be insufficient to survive a challenging global market for such products,” she said.