March 11, 2016
Thomson Reuters, IRTI and CIBAFI in Partnership with CIMB Islamic Bank Launches New Study on the Outlook of Islamic Finance in Indonesia
Jakarta – Thomson Reuters, the Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group, and the General Council for Islamic Banks and Financial Institutions (CIBAFI), today launched a new Indonesia Islamic finance report titled “Prospects For Exponential Growth” at a ceremony in Jakarta. The study was prepared in strategic partnership with CIMB Islamic Bank.
The ceremony, which took place in the Borobudur Hotel, Jakarta, was also attended by executive representatives from CIMB Group, Thomson Reuters, IRTI and CIBAFI and other industry stakeholders in Indonesia.
Rafe Haneef, Chief Executive Officer of CIMB Islamic Bank, said: “We are pleased to partner with IRTI, Thomson Reuters and CIBAFI to further support the provision of knowledge and market intelligence on the Islamic finance industry. Indonesia, having the world's largest Muslim population presents a wide spectrum of unique opportunities for Islamic finance that is well positioned to play a central role in supporting economic development. At CIMB Islamic Bank, we are always committed in enhancing the Islamic finance industry through the sharing of knowledge, and are confident that this study will provide a comprehensive overview on the development of the Islamic finance industry in Indonesia and how these opportunities can be best explored
The study highlights how Indonesia’s vast natural resources and strategic geographic location, offers great potential for economic growth, and an array of opportunities for the Islamic finance industry. Unlike other countries, the Islamic finance industry in Indonesia has largely been built up on community based initiatives. This has led to the development of unique features such as the presence of rural Islamic banks, retail sukuk, Hajj funds and various innovative social finance initiatives. Now with the government making the development of the Islamic finance industry a key pillar in their overall economic growth strategy, the study expects the industry to grow into a strong and sustainable sector of the financial services industry, while still maintaining many of its unique products and services. The government is expecting this to drive up the market share of Islamic banking from 5 percent today to 11 percent by 2020.
Professor Dr. Mohamed Azmi Omar, Director General of IRTI, said: “With the remarkable introduction of the new Islamic financial services roadmap, the growth of the industry is estimated to more than double in the next five years. The study looks into retail and corporate growth opportunities across key Islamic financial sectors and asset classes; including Islamic banking, takaful, Islamic asset management, sukuk and Islamic social finance.”
Mustafa Adil, Acting Head of Islamic Finance at Thomson Reuters, said: “Despite recent economic headwinds faced by Indonesia, the country still holds unique underlying economic characteristics that would support accelerated growth and draw foreign investment. The recent announcement by Indonesian President Joko Widodo to ease restrictions on foreign investment in almost 50 economic sectors demonstrates the leadership’s willingness and commitment in fostering a business environment that is more attractive for new investments.”
“The study is based on a retail consumer survey and exclusive interviews with leading stakeholders that highlights how Islamic finance growth will be driven by opportunities for Islamic banks to finance the development of expansion projects that tap into the real economy,” Mr. Adil added.
Abdelilah Belatik, Secretary General of CIBAFI, said: “The seventh in our series of Islamic Finance Country Reports, we are confident that the latest study provides the information and analysis required to better understand and capture the opportunities that Indonesia presents in the Islamic finance space. We have no doubt that in the coming decade, we will see Indonesia become a leading market and a key pillar for the growth of the global Islamic finance industry and broader Islamic economy.”
About CIMB Islamic Bank
CIMB Islamic Bank, licensed under the Malaysia’s Islamic Financial Services Act 2013, is the main operating entity of the CIMB Group's global Islamic banking and finance franchise.
It operates in parallel with the Group’s universal banking platform, where it offers Shariah-compliant products and services to the Group's wholesale banking, consumer banking, commercial banking and asset management businesses.
CIMB Islamic’s products and operations are managed in strict compliance with Shariah principles under the guidance of the CIMB Islamic Board Shariah Committee, which comprises some of the world's leading Shariah experts or scholars. CIMB Islamic provides comprehensive and innovative Shariah-compliant financial products and services to meet the needs of individuals, small and medium scale enterprises as well as large institutional customers.
CIMB Group's Islamic banking and finance business is supported by the Group’s network of over 41,000 staff in 17 countries comprising an experienced senior management team and a global team of Islamic banking and financial services professionals in all core components of the Islamic banking and financial services market. CIMB Group also has the most extensive retail branch network in ASEAN, with more than 1,000 branches as at 30 September 2015. Outside of Malaysia, CIMB Islamic operates a universal offering in Indonesia and Singapore with a focus in wholesale banking in the other 14 countries. For more information, go to http://www.cimbislamic.com/
About the Islamic Research and Training Institute:
The Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank Group (IDBG), was established in 1401H (1981) to undertake research, training and advisory activities in Islamic Economics and Finance to facilitate the economic, financial and banking activities in IDB member countries to conform to Shari’ah. A knowledge-based organization, IRTI is one of the pioneers in promoting and supporting the development and sustenance of a dynamic and comprehensive Islamic Financial Services Industry, which supports the socioeconomic development of IDB member states and Muslim communities across the globe. For more information about IRTI, please visit www.IRTI.org
About Thomson Reuters:
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.
About the General Council for Islamic Banks and Financial Institutions (CIBAFI):
CIBAFI is an international organisation established in 2001 and headquartered in the Kingdom of Bahrain. CIBAFI is affiliated with the Organisation of Islamic Cooperation (OIC).
CIBAFI represents the Islamic financial services industry globally, defending and promoting its role, consolidating co-operation among its members, and with other institutions with similar interests and objectives. With nearly 120 members over 30 jurisdictions, representing market players, international inter-governmental organizations and professional firms, and industry associations. For more information about CIBAFI, please visit www.CIBAFI.org
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