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Sunday, 25 October 2026

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Islamic Finance Is Approaching Half the Market. Its Next Test Is Economic Impact

Malaysia's Islamic finance industry continues to expand, with strong growth in business financing, microfinancing and sukuk issuance. But market leadership should be measured by more than financial volume. The next challenge is translating capital into productive investment and sustainable business growth.

By Katherine (Kay)2 min read

Kuala Lumpur, 25 October 2026 – Malaysia’s Islamic finance industry continues to expand, reinforcing the country’s position as a leading international centre for Shariah-compliant financial services.

In remarks reported on 25 October, Bank Negara Malaysia Governor Abdul Rasheed Ghaffour highlighted the sector’s contribution to financing businesses and supporting economic activity.

The figures included approximately RM160 billion in sukuk issued to finance the real economy in 2025, alongside 9.7% growth in Islamic banks’ business financing and 13.3% growth in microfinancing for micro, small and medium enterprises.

These indicators demonstrate the industry’s considerable scale. But as Islamic finance matures, its next challenge is ensuring that financial growth translates into stronger economic outcomes.

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Author

  • Kay like to explores the intersection of money, power, and the curious humans behind them. With a flair for storytelling and a soft spot for market drama, she brings a fresh and sharp voice to Southeast Asia’s business scene.
    Her work blends analysis with narrative, turning headlines into human stories that cut through the noise. Whether unpacking boardroom maneuvers, policy shifts, or the personalities shaping regional markets, Kay offers readers a perspective that is both insightful and relatable — always with a touch of wit.