Islamic banking has great potential in social financial instruments — Mustapa

Islamic banking has great potential in social financial instruments — Mustapa
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KUALA LUMPUR (Nov 25): Banking and financial institutions have a collective role to play in rebuilding the country after the devastation by Covid-19, said Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed.

He said efforts to realise the goal is not solely the government’s responsibility.

In his speech at the launch of BangKIT Micro Financing by Bank Islam Malaysia Bhd here today, he said Islamic social finance is very relevant in addressing the current challenges and reviving the country's ailing economy.

“Islamic banking has great potential to capitalise on Islamic social financial instruments such as zakat, waqf and alms.

“These instruments should not be limited to providing for the basic need and livelihood of the needy or for religious purposes such as construction of mosques and madrasah,” he said.

Mustapa said the instruments could be expanded to develop the underprivileged and communities that have been severely affected by the economic uncertainty, to enable them to cope and become more self-reliant in the long run.

He said the introduction of the social finance programme under the Prihatin Economic Stimulus Package, iTEKAD Micro Financing, is an example of a programme specifically to help and support B40 micro-entrepreneurs and the disadvantaged whose livelihoods have been impacted by the pandemic.

“Covid-19 has changed the lives of all of us. The impact is huge for all parties, especially micro and small enterprises.

“But we cannot give up. We must continue to work and be creative in ensuring that the economy can recover. This is because the vaccine to prevent the spread of this pandemic is still a long way from here,” he said.

In the meantime, he said, the government would continue to address the challenges by balancing the necessity to protect life and sustainability of the economy.

“The economic stimulus package, economic recovery plan (PENJANA) and Kita Prihatin have placed Malaysia in a stronger position to recover to pre-pandemic level.

“In terms of planning over the long term, Budget 2021, which is by far the largest in our history has also provided a solid foundation for the 12th Malaysia Plan,” he said.