Page 74 - CMA Journal (Mar-Apr 2025)

Focus Section

including government-private sector collaboration, will
CASE STUDY 5 help align Islamic finance with Pakistan’s ethical,
Etiqa Takaful Berhad
religious, and socio-economic goals.
Etiqa is a regional leader in digital Islamic insurance, 6) Expand Green Sukuk and ESG-Aligned Offerings
leveraging technology for ethical insurance solutions.
Building on the successful issuance of Pakistan’s green
Key highlights:
sukuk, the country can further develop Islamic financial
• Operates across five Southeast Asian markets, serving
products linked to environmental and social goals. This
over 11 million customers.
will attract sustainable investments and support
• Manages USD 2 billion in premiums and USD 11 Pakistan’s climate and development objectives, in line
billion in assets.
with global ESG trends.
• First Malaysian takaful provider to endorse the UN
Principles for Sustainable Insurance (PSI). Conclusion
• Dominates Malaysia’s online takaful market with a Islamic finance, based on Shariah principles of
55% share. risk-sharing, transparency, and the prohibition of
interest, reached $4 trillion in assets in 2023. The sector is
Key Lessons for Pakistan from the Global led by Islamic banking (70%) and sukuk (25%), while
Islamic Finance Landscape takaful and Islamic funds remain underdeveloped. A few
countries—Saudi Arabia, Iran, Malaysia, and the
1) Tap into Growth Opportunities UAE—along with the GCC region (holding 52.5% of
Pakistan currently accounts for only 2% of global Islamic assets), dominate the market. Meanwhile, non-Muslim
finance assets, despite having a large Muslim population financial hubs like the UK and Luxembourg continue to
and growing demand for Shariah-compliant solutions. To expand global outreach.
expand its share, Pakistan should enhance Islamic Digital innovations such as gold-backed tokens, tokenized
banking, increase sukuk issuance, and integrate digital sukuk, and Shariah-compliant cryptocurrencies are
financial services—drawing inspiration from successful improving liquidity and inclusion, with the global market
models in Malaysia, Saudi Arabia, and the UAE. projected to grow to $6.7 trillion by 2027.
2) Strengthen Shariah Governance and Regulation Pakistan, holding just 2% of global Islamic finance assets,
A centralized regulatory framework, like Malaysia’s should prioritize the development of a unified
Shariah Advisory Council, can ensure consistency, Shariah-compliant regulatory framework, advance
credibility, and compliance across all Islamic financial Islamic fintech, expand takaful and fund offerings, and
products. Such a system will improve investor build on its green sukuk initiatives to increase market
confidence, reduce duplication, and support innovation share and enhance financial inclusion.
in line with Islamic principles. References
3) Accelerate Islamic Fintech Development https://alhudacibe.com/pressrelease237.php
https://www.ifsb.org/publication/?_sft_publications_category=islamic-financial-stability-r
Pakistan should embrace digital transformation by eport
https://www.businessresearchinsights.com/market-reports/takaful-islamic-insurance-mar
leveraging blockchain, Islamic cryptocurrencies,
ket-120329
gold-backed tokens, and tokenized sukuk. These tools https://dailypostusa.com/news/business/sukuk-issuance-in-mena-rises-48-in-h1-2024-driv
en-by-green-and-social-projects/?utm
can improve transparency, accessibility, and financial https://economymiddleeast.com/news/islamic-banking-assets-to-hit-5-trillion-by-2025-da
inclusion—especially for underserved populations— ta-reveals/?utm
https://www.gov.uk/government/news/government-issues-first-islamic-bond
and position Pakistan in the growing Islamic digital https://www.fitchratings.com/research/islamic-finance/nigerian-islamic-finance-industry-t
finance space. o-continue-growth-on-policy-push-25-01-2023
https://pakobserver.net/uks-islamic-banking-assets-surge-26-percent-to-8-2bn-in-2023-fit
4) Grow the Takaful and Islamic Funds Sector ch-ratings/?utm
https://www.arabnews.com/node/2597874/business-economy
The Takaful (Islamic insurance) and Islamic asset https://coindataflow.com/en/prediction/onegram
https://coindataflow.com/en/prediction/islamic-coin
management sectors remain underdeveloped. Pakistan https://medium.com/coinmonks/the-tokenization-of-real-estate-in-the-uae-a-revolutiona
should introduce targeted incentives, tax benefits, and ry-change-7e1a7ec6c2ef
https://www.ey.com/en_lu/insights/real-estate-hospitality-construction/real-estate-tokeniza
supportive regulations to encourage growth. Regional tion-a-new-era-for-property-investment-and-luxembourg-s-strategic-role
https://blog.halal.io/unlocking-real-world-assets-rwas-in-islamic-defi/
models such as Malaysia’s Takaful framework can offer
https://primexbt.com/for-traders/gold-backed-cryptocurrency/
useful guidance. https://www.zawya.com/en/opinion/markets-insights/tokenized-sukuk-islamic-bonds-ma
de-accessible-and-liquid-lcbo62tq
5) Increase Public Awareness and Institutional Support https://www.haqq.network/blog/haqq-insights-understanding-defi-sukuk
https://gfmag.com/banking/worlds-best-islamic-financial-institutions-2024/
Promoting Islamic financial literacy through media,
This write-up has been prepared by Ms. Maiyra Ahmed, Assistant
educational curricula, and community outreach can drive Director R&P under the supervision of Mr. Shahid Anwar, Director R&P.
broader adoption. Enhanced institutional support,
72 ICMA’s Chartered Management Accountant, Mar-Apr 2025