Islamic Trade Finance : An Opportunity for Malaysia
Islamic trade finance (ITF) offers a meaningful opportunity for Malaysia. ITF can play a substantial role to support trade, foster growth, and accelerate post-pandemic recovery. In addition to its impact on the domestic economy, enhancing ITF can b...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Kuala Lumpur
2021
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| Online Access: | http://documents.worldbank.org/curated/en/947961628671089517/Islamic-Trade-Finance-An-Opportunity-for-Malaysia http://hdl.handle.net/10986/36134 |
| Summary: | Islamic trade finance (ITF) offers a
meaningful opportunity for Malaysia. ITF can play a
substantial role to support trade, foster growth, and
accelerate post-pandemic recovery. In addition to its impact
on the domestic economy, enhancing ITF can bring benefits to
other Organization of Islamic Countries (OIC)-member
countries and for the global Islamic finance industry in
which Malaysia is an established leader. This report
explores the ITF opportunity by considering: (1) the current
state of global trade finance and of ITF; (2) institutions
and instruments active in providing ITF; (3) key challenges
ahead in expanding ITF; and (4) opportunities for expanding
ITF in Malaysia. The report includes (5) a set of
recommendations for stakeholders in Malaysia and beyond to
avail of the opportunity that ITF offers. While the
recommendations are focused on Malaysia, they may also have
relevance for other developing economies where Islamic
finance is relevant. The report argues that key strides have
already been made in Malaysia and globally to establish ITF
concepts, products, and structures. The relative
under-utilization of ITF is due to challenges related to
awareness, promotion, scale, and harmonization. Addressing
these challenges, through a set of recommendations, can
foster ongoing growth of ITF in service of Malaysia’s
development objectives. |
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