The Islamic Financial Services Board (IFSB) and the Asian Development Bank (ADB) have jointly launched Islamic Finance for Asia: Development, Prospects, and Inclusive Growth, a publication to promote better understanding of the Islamic financial services industry in Asia.
The book was launched by ADB Vice President Stephen Groff
during an ADB-IFSB panel discussion on how Islamic finance Can
contribute to sustainable growth in Asia, which took place on 4 May
2015 in Baku, Azerbaijan, during the ADB Annual Meeting 2015.
The publication is a reference for jurisdictions in other regions that aim to understand, introduce and develop Islamic finance. It also aims to increase the awareness on Islamic finance among ADB’s member countries, as a potential source for financing infrastructure projects, diversifying public debt management as well as improving the supply of high quality liquid instruments.
Broadly speaking, the growth of Islamic finance has underscored its potential as an alternative financing source for infrastructure and economic development in Asia. ADB, for example, has used Islamic finance to support private sector wind energy projects in Pakistan. Islamic finance is a source of investment financing in both advanced and emerging economies, and a means for diversifying funding and broadening risk exposures at both institutional and macroeconomic levels.
An additional dimension of Islamic finance is that it provides financial services for all segments of the population, thus improving financial inclusion, including for those who are currently unbanked or not inclined to use conventional financial products.
"Delivering financial services to needy and low income groups is vital for Asia's ongoing battle against poverty but many countries in the region still have low financial inclusion rates," said Groff. "As this publication notes, Islamic finance has the potential to expand access to finance for projects and financial inclusion for low income groups, and Asia stands to be one of the biggest beneficiaries by channeling these additional resources."
Jaseem Ahmed, Secretary-General of the IFSB stated that the IFSB is pleased that its cooperation with the ADB has resulted in in a publication that clarifies how Islamic finance can serve as a catalyst for the goals of economic development and social inclusion. “The launch of the publication is especially noteworthy – as it aims to identify the key challenges and opportunities faced by policymakers as they work towards mainstreaming Islamic finance into national development and poverty reduction strategies. The publication also complements the existing efforts undertaken by the IFSB under the ADB's technical assistance, such as the launch of the Prudential and Structural Islamic Finance Indicators (PSIFI) database, and the development of e-learning modules for the implementation of the IFSB Standards in the IFSB member countries”.
The publication is a summary compilation of the presentations and conference papers presented at the Conference on Islamic Finance for Asia: Development, Prospects and Inclusive Growth and a Roundtable Session for Regulators, jointly organised by the two institutions in November 2013. At the end of 2013, Islamic banking and sukūk in Asia represented 49% and 45%, respectively, of the global Islamic finance assets. This growth can be witnessed not just in the size of total assets and the number of Islamic finance institutions and products, but also in the development of underlying financial infrastructure supporting the industry, such as legal and regulatory frameworks and human capital development.
The authors of various chapters – who were also the speakers in the conference and roundtable – have summarised the views presented in various sessions of these events focusing on the growth and development of Islamic finance in Asia; legal and regulatory issues; financial inclusion; the role of sukūk; implementation of global prudential standards, initiatives undertaken by governments and the public sector, and the way forward for Islamic finance in Asia.
Interested?
Download the book at the IFSB website or at the ADB website.
Read the Suroor Asia blog post about the PSIFI database.