Islamic Finance and Banking in Malaysia with Special Reference to Sukuk Industry
Malaysia is seen as a success story of rapid growth and structural change with equity. The country has enjoyed a stable macroeconomic environment with low unemployment and inflation rates for decades. However, due to the recent 2008 global financial crisis, the economy has experienced a slowdown in the growth rate. The government has introduced the New Economic Model of 2010 (NEM2010) to shift the country from a middle-income economy to a high-income economy by 2020. In support of these goals, the government has taken steps to liberalize its financial sector since Malaysia is one of the key players in Islamic finance. The present chapter looks into the Islamic finance landscape of Malaysia by focusing on the sukuk industry as well as prospects and challenges facing the industry. By examining sukuk market behavior, it is hoped that policymakers may utilize sukuk as key financial tools to drive the domestic financial sector and demonstrates its bearings on equitable growth.
