The Islamic financing market in Southeast Asia is “incredible” for non -Islamic players

Even the financing sector in Southeast Asia has become more permissible. Islamic finance In Southeast Asia, a total of approximately $ 859 billion in 2023, an increase of $ 754 billion in 2020, according to a study by the Islamic Sector Development and the Stock Exchange Group in London.

MAMBU, a basic banking platform, wants a compatible technology, a compatible banking platform, based in Amsterdam, to take advantage of this growing market. “The Southeast Asia market, especially Malaysia and Indonesia, is incredibly dynamic in terms of how it has grown in Islamic banking space,” says David Baker, Managing Director of APAC sales head at the company.

The company is already working with Southeast Asian customers such as Bank Islam, the largest provider in Malaysia for financial products compatible with Sharia, and Jago Bank, an Indonesian digital bank.

With the permission of Mambo

Baker says that Islamic financing is growing at the same speed as traditional banking, and thus MAMBU hopes to provide tools to support products compatible with Sharia such as share profits.

Unlike traditional banking services, Islamic financial institutions should avoid companies that deal in harmful products or are considered “forbidden”, such as pork, alcohol or gambling.

Islamic banks cannot also impose fees on attention, so they must instead generate returning through some other mechanisms, such as sharing or renting profits.

Baker is optimistic that the inhabitants of Southeast Asia and the most intelligent will be attracted towards digital financial solutions-especially those that reflect Islamic principles.

Indonesia, the world’s largest Islamic country, is a clear targeted market for Islamic finance. The neighboring Malaysia, where two -thirds of the population as Muslims are another option. There are also a large number of Muslim population across Singapore, the Philippines and Thailand.

Malaysia, the first country in the region, has adopted Islamic financing, “has reached its climax” when it comes to growth. Instead, Indonesia provides more capabilities to insure retail and insurance “Takaful”, a type that follows Islamic principles.

“There is a great power to advance in the country, so many companies want to come to Indonesia,” says Nestorovic.

However, it warns that Southeast Asia provides its own risks. For one of them, unlike the most homogeneous Middle East market, Southeast Asia is more heterogeneous, which means that companies will need to adapt their offers for a group of different economies, consumer rules and regulations.

Baker, from Mambo, admits the challenges in Southeast Asia, including the need to follow up on regulations. However, the size of the opportunity exceeds the risks.

He says: “We see her growing and growing, and I think this is a factor in the cause of supporting governments and organizers.”