The IFSB and Bank Indonesia Successfully Organized a Seminar and Workshop on Financial Inclusion and Islamic Finance
Kuala Lumpur, 14 December 2018 – The Islamic Financial Services Board (IFSB) and Bank Indonesia have successfully conducted a joint public seminar and workshop on financial inclusion and Islamic finance on 11 December 2018, in Surabaya, Indonesia. Themed, “Broadening Economic Frontiers and Reducing Income-Gaps through Inclusive Finance: The Islamic Finance Solution”, the programme was featured as part of the 5th Indonesia Shari’a Economic Festival, being held from 11 – 14 December 2018 in Surabaya Indonesia.
The seminar began with opening remarks by the Secretary-General of the IFSB, Dr. Bello Lawal Danbatta, who stressed on the importance of improving the economic conditions of the Muslim-majority countries where in many instances, high levels of poverty persist. A particular observation in these countries is also often high levels of financial exclusion, and with voluntary exclusion due to religious beliefs often being cited as a factor. He invited the panelists and speakers at the seminar to focus on finding practical solutions to address this challenge.
Dr. Danbatta’s remarks were followed by a Keynote Address by Mr. Agusman, the Executive Director of Communications at Bank Indonesia, who agreed upon the importance and relevance of the topic at hand, and appreciated IFSB’s efforts in attempting to provide meaningful regulatory and supervisory guidelines to support financial inclusion efforts through Islamic finance. He further highlighted Indonesia’s various initiatives aimed at addressing the financial inclusion challenge, including its collaborations with international partners to support development of Islamic social finance policies such as zakah and waqf core principles.
The morning session was a panel discussion on “Unlocking Economic Opportunities and Enabling Livelihood Creation: The Islamic Finance Proposition” moderated by Dr. Prayudhi Azwar, Economist at Bank Indonesia Institute. He invited the panelists to identify the root cause of financial exclusion and provide solutions to address economic inequalities. The panelists include Dr. Aida Othman, Director, ZICO Shariah, Partner, Zaid Ibrahim and Co, Malaysia; Dr. Hurriyah El Islamy, Executive Board Member, Hajj Fund Management Agency, Mr. Nik Kamarun Nik Kamil, Policy Manager, SME Finance, Alliance Financial Inclusion and Mrs. Luci Irawati, Deputy Director of Policy Review and International Standard, Indonesia Financial Services Authority (OJK). The key takeaways from the panel discussion included highlighting appropriateness of financial inclusion to enhance living standards and alleviating poverty, addressing suspicion and reluctance of the low-income segments from availing formal financial services, developing practical roadmaps for enhancing capacity and competitiveness of Islamic financial inclusion products, and also reinforcing social objectives of the Islamic economy and finance with a view to addressing challenges of the poor.
The afternoon session was an interactive technical workshop on Approaching Financial Inclusion through Islamic Finance: Challenges, Opportunities and Solutions conducted by Mr. Syed Faiq Najeeb, Head of Standards Development at the IFSB. He discussed practical measures to enhance Shariah-compliant financial inclusion activities in line with guidance from the IFSB’s Exposure Draft of Technical Note 3 on Financial Inclusion and Islamic Finance. The audience interacted on a number of discussion points including permissible and impermissible activities, cost effectiveness of products and operations, critical success factors for enhancing financial inclusion, utilisation of Islamic social finance for supporting financial inclusion, and also on the importance of regulatory coverage for financial inclusion activities by non-banks and other types of institutions.
Overall, the programme was well attended with more than 50 participants from various backgrounds including regulators, policymakers, market players, academics, and other interested stakeholders.