Page 45 - CMA Journal (Mar-Apr 2025)

Focus Section

b) Economic Resilience: Expanding Takaful into sectors provides a benchmark for innovation and sector
like agriculture and healthcare can protect vulnerable growth.
populations from unforeseen financial risks.
• Saudi Arabia: With its comprehensive Sharia-compliant
c) Corporate Applications: Developing comprehensive financial systems, Saudi Arabia offers lessons in
Takaful products for businesses can enhance Pakistan's institutional transformation and sector-wide integration.
economic stability.
• UAE: The UAE's focus on diversification and innovation
Current Landscape of Islamic Finance in Islamic finance, along with its integration into global
markets, presents a model for Pakistan to emulate.
in Pakistan
• Indonesia: Indonesia's emphasis on grassroots Islamic
The current landscape of Islamic finance in Pakistan presents finance effectively engages rural communities, offering
both significant achievements and ongoing challenges:
ideas for expanding access and inclusion in Pakistan's
a) Achievements: Islamic finance has seen notable rural areas.
growth, with Islamic banking expanding by 20%. Public
awareness campaigns have played a key role in A Roadmap for Pakistan
increasing the acceptance of Sharia-compliant financial To harness the full potential of Islamic finance, Pakistan must
products. Additionally, global partnerships, such as prioritize the following strategic actions:
those with the Islamic Development Bank, have
a) Strengthening Institutions: Establish dedicated
enhanced the sector's credibility and expertise,
supporting its continued growth and development. bodies to regulate and oversee Islamic finance,
ensuring Shari'ah compliance and fostering innovation.
b) Challenges: Despite progress, the sector faces several
challenges. The regulatory framework requires b) Education and Awareness: Launch nationwide
campaigns to inform individuals and businesses about
strengthening to ensure consistency and transparency.
Limited access to Islamic finance in rural areas, due to the benefits and principles of Islamic finance.
lack of awareness and infrastructure, restricts its c) Expanding Access: Design inclusive financial products
broader adoption. Additionally, resistance from that cater to the needs of diverse and underserved
conventional banks, which dominate certain sectors, communities, including those in rural areas.
hinders the full integration and growth of Islamic
d) Collaboration: Engage with international organiza-
finance.
tions to adopt global best practices and attract foreign
Opportunities for Pakistan investment in the Islamic finance sector.
Islamic finance tools present significant opportunities to e) Digital Transformation: Utilize digital platforms and
catalyze sustainable development and economic financial technology to make Islamic finance tools more
diversification: accessible, especially in remote and marginalized
regions.
a) Economic Diversification: Leveraging Islamic finance
tools in emerging sectors like technology, tourism, and Conclusion
green energy can reduce dependence on traditional
Islamic finance tools offer Pakistan an unparalleled
industries. For example, Green Sukuk could be used to opportunity to build an equitable and resilient economy
fund renewable energy projects, positioning Pakistan as
rooted in ethical principles. By integrating instruments such
a leader in sustainable development.
as Zakat, Sukuk, Mudarabah, Musharakah, Waqf, and Takaful,
b) Global Leadership: By fostering innovation in Islamic the country can effectively address socio-economic
finance, Pakistan can establish itself as a global hub for challenges, reduce dependence on conventional financial
Islamic financial services, attracting international systems, and promote inclusive growth. With a focus on
investors and experts. collaboration, innovation, and sustainability, Pakistan can
become a global leader in Islamic finance and build a fairer,
c) Sustainable Development Goals (SDGs): Aligning
more prosperous future.
Islamic finance with SDGs offers a unique opportunity
to address critical challenges such as poverty,
inequality, and climate change, while ensuring ethical About the Author: The author is an Associate Member of ICMA
practices that resonate with global values. Pakistan and currently serves as the Chief Financial Officer at Bilal
Contracting & Transport (Pvt) Ltd. He is also a Certified Islamic
Learning from Other Countries Banker (CIB). With over two decades of experience in accounting
and financial management, he has worked across diverse
Pakistan can gain valuable insights from countries that have industries, helping businesses navigate financial complexities and
excelled in Islamic finance: achieve their growth goals.
• Malaysia: Known for its pioneering role in Sukuk and its
well-regulated Islamic banking sector, Malaysia

ICMA’s Chartered Management Accountant, Mar-Apr 2025 43