The Malaysia Reserve
10 October 2025
Malaysia to modernise Islamic finance, strengthen halal ecosystem
(graphic: TMR)
MALAYSIA is advancing a new phase of Islamic economic leadership through innovation in finance, digitalisation of sukuk, and expansion of the halal industry under the Peneraju Ekonomi Islam agenda.
Prime Minister Datuk Seri Anwar Ibrahim said Islamic finance must evolve beyond conventional structures to meet current demands and offer sustainable solutions for the ummah.
“Islamic finance cannot remain passive within old traditions. It must evolve to meet today’s realities and lead with strong, solution-based instruments,” he said during the tabling of Budget 2026.
The government has pioneered risk-sharing financing models such as musyarakah, murabahah and blended finance, designed to enhance inclusivity and social impact across industries.
Malaysia’s halal ecosystem will continue to be expanded and strengthened through faster certification and greater industry participation.
The Department of Islamic Development Malaysia (Jakim) will expedite the issuance of halal certifications, while the Halal Development Corporation (HDC) will intensify efforts to enhance compliance among companies.
SME Bank will provide RM100 million in dedicated financing for halal-related small and medium enterprises (SMEs), while Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will double its government guarantee facility for halal business financing to RM2 billion.
A new Perak Halal Industrial Park will also be developed in Manjung with an investment of RM124 million, supporting Malaysia’s ambition to strengthen its position as a global halal production and trade hub.
Meanwhile, the Labuan International Business and Financial Centre (Labuan IBFC) will be developed into a Digital Islamic Finance Hub, positioning Malaysia as a global centre for Islamic fintech.
The Global Sukuk Tokenisation Initiative will enable sukuk to be digitised and traded transparently on retail digital exchanges within Labuan IBFC.
The government will also introduce Climate Sukuk to fund green projects and distribute financial returns in the form of carbon credit dividends.
Meanwhile, the iTEKAD blended finance programme will be expanded with RM35 million in matching funds to help recipients improve their skills and access more stable, higher-income employment opportunities.
Revitalising wakaf for social impact
The MADANI Wakaf framework will also be strengthened to turn waqf assets into productive, community-driven investments.
UDA Holdings Bhd will lead several wakaf development projects in Penang, including Taman Wakaf Seetee Aisah Phase 2 and 3, and Taman Sultan Sallehuddin Phase 1B and 2B, involving total investments of nearly RM250 million.
A tokenised cash wakaf sukuk will also be launched to finance essential social infrastructure such as special education facilities, autism centres, and palliative care institutions, allowing individual contributions to be converted into sustainable social funding.
Malaysia’s Islamic economy agenda marks a decisive shift towards innovation-led finance, socially impactful wakaf development and a stronger halal ecosystem, reaffirming the country’s leadership in the global Islamic economy.
(Web Source: https://themalaysianreserve.com/2025/10/10/malaysia-to-modernise-islamic-finance-strengthen-halal-ecosystem/)