Invest in alternative options to drive halal industry’s growth -HDC

KUALA LUMPUR, Aug 6 — There is a need to invest in alternative and viable options for Shariah-compliant financing, community development banks and Sukuk to drive the halal industry’s future growth.

Such investments will spur a host of initiatives that are designed to help micro, small and medium enterprises (MSMEs) that are in need of financing support and assistance, said Halal Development Corporation Bhd (HDC) chief executive officer Hairol Ariffein.

In his closing speech at the virtually-held Securities Commission Malaysia-HDC Forum on Shariah-Compliant Fundraising for MSMEs today, he highlighted the need for a mechanism that would act as a guideline for ethical investment in the halal industry, while simultaneously enabling the Islamic capital markets’ growth.

“There should be a dedicated mechanism to provide guidance in screening the Shariah status of unlisted MSMEs for equity crowdfunding and peer-to-peer financing platform operators and Shariah advisers.

“As the halal industry faces challenges due to the lack of funding, this initiative will certainly be the solution and crutch to provide MSMEs with the required financial backing,” he said.

Hairol added that the Islamic financial services should be fully optimised by the halal industry sectors, and noted that the groundwork to create awareness on the Islamic capital markets’ offerings has begun

“This is expected to generate a never-seen-before level of investment opportunities and Shariah-compliant halal companies in the country.

“We strongly believe that the linkages created in the halal sector will help enhance the ecosystem for Shariah-compliant fundraising activities, particularly in the market-based financing segment, as well as addressing obstacles and issues faced by MSMEs regarding funding accessibility,” he added.