September 2024
Unleashing the potential of Islamic finance will help us achieve the increasingly challenging United Nationâs Sustainable Development Goals (SDGs), says a new report from the International Federation of Accountants, Malaysian Institute of Accountants (MAI) and the World Bank.
The worldwide economic downturn, resulting from the Covid- 19 pandemic, has worsened the already significant $4.2 trillion funding gap to achieve the 17 SDGs. As countries strive to finance the ambitious scope and scale of the SDGs they also face the complex task of serving financially underserved communities.
The report states that a major tenet of Islamic finance is to protect people, planet and prosperity, and this underpinning can contribute to fresh thinking on sustainable development paradigms, interpretations and approaches.
The SDGs also create opportunities for Islamic finance growth, just as Islamic finance can drive greater sustainable development.
Advancing Islamic finance has the potential to not only to serve usually under-banked Muslim communities, but have a broader application considering its synergies with the SDGs.
The IFA emphasised that Malaysia has become a pioneer of Islamic finance, attributed in part to its strong governance, supportive regulatory ecosystem, and the pivotal role of a local professional accountancy organisation, MIA, in education and stakeholder outreach. âThough every jurisdictionâs use of Islamic finance would work differently, Malaysia and MIA can serve as examples to learn from,â says the report.
IFAC President Asmâa Resmouki stressed: âProfessional accountancy organisations are playing a key role in advancing sustainable financing, and given the professionâs commitment to support the SDGs, principles of Islamic finance should be considered a viable approach.
âWe encourage all IFAC members to look towards best practices such as those cultivated in Malaysia, and seize opportunities presented in their own jurisdictions.â
