Indonesia, the world’s largest Muslim majority country, may have been rather late in entering the Islamic (sharia) business compared to other countries, but the mood in the nation is upbeat that it is catching up thanks to several advantages.
The Southeast Asian country is projected to have a population of 184 million Muslim adults, of which over 50 percent are from the upper middle class and mostly work in the private sector.
Besides, the nation’s Islamic financial services are growing at a swift pace even as the pandemic ploughs on.
Indonesia’s Islamic banking assets in 2020 grew by 10.9 percent, while the conventional ones only clocked 7.7-percent growth.
Likewise with third-party funds — Islamic banking recorded an increase of 11.56 percent, slightly superior to conventional banks, which registered a rise of 11.49 percent.
“In terms of financing, Islamic banking recorded the largest growth of 9.4 percent, far ahead of conventional banking that only grew by 0.55 percent.
In addition, the market share of the Islamic capital market has reached 17.39 percent, and the number of cooperatives for savings and loans and sharia financing has reached 4,115 units,” State Enterprises Minister Erick Thohir, concurrently chairman of the Sharia Economic Community, informed.
He said the development of Islamic economics and finance in Indonesia won it accolades from the international community in 2020.
This was apparent from the Islamic Finance Development Report 2020, which placed Indonesia in the second place globally and the Global Islamic Economy Indicator 2020, which placed Indonesia in the fourth position globally.
To strengthen the national sharia economy, the government on February 1 this year merged the sharia compliant subsidiaries of three state-owned lenders — Bank Mandiri, Bank Negara Indonesia (BNI), and Bank Rakyat Indonesia (BRI) to form Bank Sharia Indonesia (BSI).
BSI is expected to be one of the largest sharia banks in Indonesia and also the world, with total assets of Rp214 trillion and core capital of Rp20.4 trillion.
It is also expected to propel the development of the halal value chain in the country.
Based on the global index, Indonesia’s ranking in sharia economy and finance is among the top 10 in the fields of finance, food, and fashion,
The inauguration of BSI by President Joko Widodo (Jokowi) was well-received by the market, with the Indonesian Stock Exchange (IDX) Composite Stock Price Index (IHSG) shooting up at the start of the new week. —ANTARA NEWS