HDC, Bank Islam Launch GO Halal Fund To Support Malaysian SMEs

Bank Islam and the Halal Development Corporation (HDC) have taken a major step to boost Malaysia’s halal industry by launching a substantial RM100 million “Go Halal” Fund in Kuala Lumpur, aiming to empower Small and Medium Enterprises (SMEs) to penetrate global halal markets. This fund is designed to encourage more Malaysian SMEs to explore and export halal products internationally, with a focus on building capacity, fostering digital transformation, and growing Malaysia’s halal ecosystem.

The announcement was made by Y.B. Dato’ Seri Mohamed Azmin Ali, Senior Minister and Minister of International Trade and Industry (MITI), at a signing ceremony in June 2021. The Memorandum of Understanding (MoU) between Bank Islam and HDC underscores a shared commitment to develop a robust halal industry that empowers SMEs while aligning with Malaysia’s economic transformation goals.

Supporting SMEs Through Challenging Times

Azmin highlighted that the launch of this financing facility comes at a crucial moment, offering timely assistance to SMEs impacted by the COVID-19 pandemic and the Full Movement Control Order (FMCO) that began on June 1, 2021. “This financing facility is a concerted effort to help SMEs navigate business challenges during these tough times,” he stated. The fund aims to help around 300 SMEs, with special emphasis on boosting participation among Bumiputera-owned businesses in the halal sector.

The initiative is also closely tied to the Shared Prosperity Vision 2030, which aims to increase the contributions of B40 and M40 groups (lower and middle-income) to the nation’s economic development. Azmin urged other Islamic financial institutions to collaborate with HDC on similar programs, expanding the benefits to a broader range of SMEs in Malaysia.

The partnership between Bank Islam and HDC includes a wide-ranging suite of benefits for HDC members, from halal certification training to financial products bundled specifically for SMEs. A key focus of the collaboration is integrating digital solutions to support SMEs effectively. This is where the SMEXpert mobile app, a platform developed by Bank Islam to support the SME ecosystem, converges with HDC’s Halal Integrated Platform (HIP).

HIP is an all-encompassing digital ecosystem designed to serve stakeholders across the halal industry, including producers, service providers, government agencies, financial institutions, and even educational entities. The Go Halal Fund and SMEXpert app work in tandem with HIP, which will officially launch at the World Halal Business Conference 2021 in September. HIP currently boasts a membership of over 2,200 companies, all of which will be eligible to access the funds and support provided.

Hairol Ariffein Sahari, Chief Executive Officer of HDC, emphasized that the integrated services from Bank Islam and HDC are designed to help SMEs remain competitive despite current challenges. “This initiative provides a crucial lifeline for local businesses to not only recover from the impact of the pandemic and FMCO but also to go digital and seize global halal market opportunities,” he stated. He encouraged more SMEs to join the HIP platform to benefit from financial assistance and digital transformation support.

Bank Islam’s Chief Executive Officer, Mohd Muazzam Mohamed, reaffirmed the bank’s dedication to supporting the halal economy, noting the bank’s five-year strategic business plan aimed at navigating the unprecedented challenges of COVID-19. Bank Islam is aspiring to champion Shariah Environmental, Social, and Governance (Shariah-ESG) principles, aligning its total financing solutions to enable and nurture the entire SME ecosystem.

Mohamed stated, “As a leading Islamic banking institution, it is our responsibility to catalyze the growth of the halal economy by offering comprehensive, Shariah-compliant financial solutions tailored to industry players.” He expressed honor in partnering with HDC to develop a thriving Malaysian halal industry, emphasizing that this collaboration marks a significant milestone toward realizing their mutual goal of expanding and elevating Malaysia’s halal market on a global scale.

By working together to provide financial and strategic support, Bank Islam and HDC aim to not only empower SMEs to recover and grow but also to position Malaysia as a leader in the global halal market. The “Go Halal” Fund serves as a gateway for local businesses to build capacity, embrace digital transformation, and make their mark on the international stage.