Indonesia Deputy Finance Minister Mardiasmo has said the slow progress of Islamic financial shares was disappointing, considering the fact that Indonesia has the largest Muslim population in the world.
“Therefore, we need to intensify the education program on Islamic financial literacy,” said Mardiasmo in his speech at the third Annual Islamic Finance Conference in the South Sulawesi provincial capital of Makassar on Wednesday. The conference, with the topic “Enhancing the Role of Islamic Finance within Digital Economy Era: Opportunities and Challenge”, will take place until Thursday.
Mardiasmo said the Islamic financial market in Indonesia was still in a growing phase, with an aggregate market share of about 5 percent.
The largest contributor to this level of market share is the stock market at around 52.5 percent, followed by sukuk (17 percent) as well as banking, Takaful Islamic insurance and mutual funds each of which contributes from around 5 to 7.5 percent. Mardiasmo said there was much work to do to improve the contribution of Islamic financial institution to the financial market, including to improve Islamic financial literacy to people throughout the country through education on Islamic finance. According to the Financial Services Authority’s (OJK) Islamic literacy index in 2016, Islamic finance literacy in Indonesia was only 8.11 percent. Mardiasmo also underlined the importance of improving the role of sharia-based financial technology (fintech) to accelerate Islamic financial growth.—bbn