Industry Article

On the 1st November 2024, the Maldives Islamic Bank (MIB) introduced a series of new banking products at an event in Hulhumale s Central Park. The line-up included FaisaWear, a payment ring designed to be used as a contactless payment option. The rings, available in four styles black with a diamond cut, plain black, foral black and foral white provide an alternative to traditional bank cards and will be available at MIB branches across the Maldives starting Sunday, the 3rd November 2024.

A robust financial sector is paramount for a nation's prosperity, especially for developing countries like Malaysia, where efficient investments are the key driver of economic growth. Financial development affects a nation's environment via wealth and technical effects (Khan et al., 2022). Specifically, it boosts the availability of funds in the economy, enhancing access to capital for businesses and individuals and stimulating economic growth. This increased business and household incomes often lead to increased purchases of automobiles and mechanical appliances that consume more energy, thereby increasing carbon emissions, referred to as the wealth effect. On the flip side, better access to finance enables businesses to invest in environment-friendly technologies at lower costs. This improved energy efficiency reduces greenhouse gas emissions, ultimately promoting environmental quality, known as the technical effect. As nations worldwide passionately strive to achieve the Sustainable Development Goals (SDGs), the interplay between financial development and environmental sustainability becomes increasingly crucial for us. This is particularly true for Malaysia, a dynamic economy that endeavours to attain high-income nation status in 2025 and a net-zero emissions target by 2050. In this context, this article aims to illuminate an intriguing issue: can Malaysia's rapidly growing Islamic finance industry promote economic development while mitigating climate impact?

In a historic move, the Maldives government has decided to allocate US$100,000 from the Maldives Zakat Fund to provide humanitarian aid to Gaza, Palestine. This decision, announced by Islamic Minister Dr Mohamed Shaheem Ali Saeed, marks the first time that funds from the Maldives Zakat Fund are being directed overseas. The assistance will be channeled to Gaza through the Qatari Red Crescent, with the Islamic Ministry having previously sent aid to Gaza twice through this organization. Dr Mohamed Shaheem stated that the US$100,000 will be sent to Gaza in two instalments, with the funds earmarked for purchasing food for the people of Gaza. He emphasized that this initiative is being carried out under the directive of the president.

EyeCare's parallel sukuk istisna facility has achieved significant success, raising 86% of its target amount, reaching MVR26.07 million (US$1.68 million). This sukuk facility, priced at MVR1,000 (US$64.4) per unit, aims to support the development of an eye center with a parking facility at Hulhumale'. The issuance, classified as a debt offering, attracted considerable interest from investors, signaling confidence in the project and its potential impact. With a targeted issue size of MVR30 million (US$1.93 million), the sukuk's strong performance underscores investor optimism in EyeCare's vision for enhancing eye care infrastructure. The issuance, characterized by a profit share ratio of 8% and a semi-annual return frequency, has garnered attention for its commitment to both financial sustainability and community development.

In June 2023, the United Nations Population Fund (UNFPA), Selangor Islamic University and Yayasan KUIS signed an MoU to begin their collaborative journey towards integrating Islamic finance to holistically address vital social issues such as domestic violence , access to education and developing an intergenerational elderly care model. This initiative, driven by Maqasid Shariah principles, reflects a commitment to ethical and universally accepted objectives. The selection of areas - financial empowerment for survivors, education for children and elderly care - was underpinned by Shariah justification. The project aligns seamlessly with Maqasid Shariah, upholding human dignity, protecting lineage and preserving life. This alignment provides a robust ethical foundation, ensuring that the initiatives resonate with the broader principles of Islamic finance. Crafting sustainable initiatives posed the next challenge. The Work Kafalah Program, focusing on economic empowerment for survivors, and the Orange Fund Initiative, catering to the educational needs of survivors' children, took shape. Additionally, the Community Credit Intergenerational Model (CCIM) was proposed for elderly care. Each initiative was meticulously designed to not only address immediate needs but to foster long-term sustainability.

The first corporate sukuk facility was issued in the Maldives by the Housing Development Finance Corporation based on a mudarabah structure which was listed on the Maldives Stock Exchange (MSE) on the 17th February 2014. Later on, the company using the same structure issued three more sukuk that were listed on the MSE on the 6th December 2017, 22nd December 2019 and 19th December 2021. The subsequent issuances of sukuk in the Maldives were issued through Viyana, an electronic platform which is the private securities segment of the MSE.According to Chapter 11 of the Listing Rules of the MSE which became effective on the 30th June 2022, the private securities segment will be operated on Viyana by the MSE.