BNM Sees Bigger Role for Islamic Finance in Emerging Industries
Kuala Lumpur – Bank Negara Malaysia (BNM) said on Monday that Islamic finance will play a larger role in funding emerging, capital‑intensive industries as the country moves into its next growth phase. Governor Abdul…
Source: Fintech News Malaysia · September 25, 2026 at 4:32 AM · AI-assisted report
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KUALA LUMPUR, 25 SEPTEMBER 2026 —
Kuala Lumpur – Bank Negara Malaysia (BNM) said on Monday that Islamic finance will play a larger role in funding emerging, capital‑intensive industries as the country moves into its next growth phase.
Market Impact
Governor Abdul Rasheed Ghaffour outlined the need for specialised financing for advanced manufacturing, technology‑intensive activities and the energy transition.
He said the shift is required because these sectors typically involve longer investment horizons, larger upfront capital needs and higher technology and execution risks. “Islamic finance is well placed to address some of these needs through risk‑sharing structures and more flexible financing models,” Abdul Rasheed said.
Despite national efforts to develop higher‑value industries, financing remains concentrated in services, while funding for manufacturing is still modest relative to the investment required. Abdul Rasheed noted that the current financing mix does not match the capital intensity of the targeted sectors, underscoring the need for new Islamic financing solutions.
Islamic banking’s share of total financing rose to 48 percent in 2025 from 25 percent in 2015, according to BNM data. In the same period, the Islamic capital market expanded from RM 420 billion to RM 670 billion. The governor highlighted these growth figures as evidence that the Islamic finance ecosystem has the capacity to support more complex projects.
BNM also identified scope for greater use of sector‑specific Shariah structures and social finance to back emerging industries. The central bank said financial institutions will need stronger capabilities in sector analysis, structuring, data, talent and partnerships to deliver the required financing solutions.
The direction will be incorporated into BNM’s upcoming Financial Sector Blueprint 2027‑2030, which is being drafted around priorities that include resilience, higher‑quality jobs, sustainable businesses, renewable energy and climate readiness. The blueprint will set out how Islamic finance can be mobilised to meet these objectives.
Abdul Rasheed concluded that the enhanced role of Islamic finance is integral to Malaysia’s ambition to transition to higher‑value manufacturing and a low‑carbon economy, signalling a policy shift that could reshape funding patterns for the nation’s emerging industries.
Related: Bank Negara Malaysia