Within the framework of the COMCEC-funded SESRIC Project on “Unleashing the Potential of Islamic Finance in Supporting MSMEs in the OIC Member Countries”, the Centre, in collaboration with Bank Indonesia (BI), Bank Negara Malaysia (BNM), Saudi Central Bank (SAMA) and the Central Bank of the Republic of Türkiye (CBRT), organised a Workshop on “Promoting Islamic Social Finance and Accelerating the Growth of Halal Value Chain Ecosystem” on 20-21 September 2023 in Kuala Lumpur, Malaysia.

The workshop brought together 44 high-level participants from relevant departments of Central Banks and financial institutions from 15 OIC Member Countries and 1 regional Central Bank; the Central Bank of West African States (BCEAO), as well as two OIC institutions, namely the Islamic Development Bank Kuala Lumpur Center of Excellence (IsDB KLCoE) and International Islamic University Malaysia (IIUM). The workshop provided a valuable opportunity for discussing the potential roles of Islamic Finance and Islamic Social Finance, as well as the innovative solutions being explored and proposed by the lead partners. Furthermore, various sessions of the workshop addressed institutional aspects and models in the creation of a halal value chain ecosystem for MSMEs. In addition, the workshop included experience-sharing sessions to elaborate on the challenges faced by the participating member countries as well as their achievements in promoting Islamic finance.

The workshop commenced with opening remarks delivered by representatives of SESRIC, the International Centre for Education in Islamic Finance (INCEIF) and project partners.

H.E. Zehra Zümrüt SELÇUK addressed the gathering, thanking the COMCEC Coordination Office for its support to this event, as well as INCEIF and BNM for their technical support and facilitation in the implementation of the activity.

She underlined the significant growth of the Islamic finance market, with assets rising from 2,170 billion US$ in 2015 to 3,958 billion US$ in 2021. Estimates project the market size to reach 5,900 billion US$ by 2026. Despite this growth, challenges such as limited awareness and education, underdeveloped regulatory environments, and limited access for small and medium enterprises persist.

She therefore stressed the need for OIC countries to undertake additional efforts to understand the existing obstacles and potential opportunities related to the further advancement of Islamic social finance in their respective countries. To overcome these challenges, H.E. SELÇUK emphasized the importance of enhanced cooperation among OIC countries and relevant institutions in promoting and implementing policies and programmes to advance Islamic Financial services and products. She highlighted the efforts of SESRIC in this area, including research studies, capacity-building programmes and the publications on Islamic banking and finance.

The opening session continued with remarks delivered by H.E. Prof. Dato’ Dr. Mohd Azmi OMAR, President and Chief Executive Officer (CEO) of INCEIF as well as Ms. Anna SETYAWATI SIAMTININGSIH, Mr. Ahmad Saleh ALAJAJI, Mr. Burhan Mert ANGILI, and Ms. Nurul Izza IDRIS, representatives of BI, SAMA, CBRT and BNM, respectively.

The representatives of the project partners expressed their gratitude for this valuable partnership and shared brief insights into the efforts of their esteemed banks in promoting Islamic Social Finance and accelerating the growth of the halal value chain in their esteemed countries. In addition, they indicated their willingness to strengthen joint efforts with SESRIC and their counterparts in other OIC member countries in carrying out similar activities that could help serve as a response to the requirements of the OIC region.

The project titled “Unleashing the Potential of Islamic Finance in Supporting MSMEs in the OIC Member Countries” has been shortlisted under COMCEC’s 10th call for project proposals for financing projects in the field of financial cooperation. The project consists of an on-site workshop followed by a virtual training course on “Leveraging Key Stakeholders towards Inclusive and Sustainable Development of MSMEs.” The objective of the project is to introduce innovative and sustainable solutions for Islamic Finance and Islamic Social Finance products to enhance the resilience of MSMEs in the OIC Member Countries to potential shocks.

The COMCEC Coordination Office (CCO) introduced in 2013 the COMCEC Project Funding (CPF), a funding mechanism that finances projects submitted by the Member Countries and relevant OIC Institutions to realize the strategic objectives and outcomes of the COMCEC Strategy. Funding is provided in the form of a grant through the Development and Investment Bank of Türkiye, which is one of the main bodies in the COMCEC Project Funding scheme. Since the initiation of the CPF, SESRIC has implemented ten projects under various areas of cooperation and in accordance with sectoral themes determined by the CCO. For more details about SESRIC projects funded by the COMCEC, please visit: https://www.sesric.org/tcd-activities-projects-funded.php