17/09/2025

BIZ & FINANCE WEDNESDAY | SEPT 17, 2025

19 How MIDF harnesses Islamic finance

fresh fruit bunch yields. “This, in turn, strengthens Malaysia’s overall palm oil supply base, ensuring a more stable and sustainable production volume, and directly contributes to higher-quality and greater volumes of palm oil output,” he noted. Ultimately, this initiative is a vital investment in the backbone of the country’s palm oil industry – driving sustainable growth, improving competitiveness, and boosting palm oil exports on the global stage. Furthermore, MPOB urged the government to increase targeted export promotions supported by structured market trials and robust government-to-government engagement. “Leveraging on free trade agreements and expanding into emerging markets across South America, Africa, the Middle East, and Eastern Europe will be key to sustaining export growth. “Regional cooperation platforms such as Indonesia-Malaysia-Thailand Growth Triangle and Brunei Darussalam–Indonesia–Malaysia– Philippines East Asean Growth Area should also be maximised,” he said. According to Ahmad Parveez, building a skilled workforce with expertise in ESG compliance, advanced technologies, and market specific requirements is critical for maintaining Malaysia’s position as a trusted, competitive and sustainable global palm oil supplier. support SMEs’ funding gaps by providing cash flow financing to undertake the projects. What upcoming initiatives or products can we expect from MIDF to strengthen its ESG financing portfolio? MIDF currently manages several government funds focused on ESG including the Sustainable and Green Biz Financing (SGBF) and Sustainable Mobility Biz Financing (SMBF) schemes. The SGBF offers attractive financing rates as low as 2% per annum to eligible Malaysian companies, supporting their transition towards greener technologies, improved energy efficiency, and more sustainable business practices. All of this is in line with the nation’s commitment to a low-carbon, environmentally responsible future. The government is also strengthening the electric vehicle (EV) ecosystem by channelling financing support through MIDF under the Sustainable Mobility Biz Financing scheme. This facility offers targeted financing to Malaysian companies operating within the EV automotive value chain. In the coming years, how does MIDF intend to deepen its role in financing Malaysia’s green transition and low-carbon agenda? MIDF will play a proactive role by aligning its financing mandates with national policies such as the National Energy Transition Roadmap and the 12th Malaysia Plan’s low-carbon aspirations. Since MIDF is now within the MBSB Group, it can promote and offer SME financing products that combine government funds and commercial banking funds to help local Malaysian companies adopt greener technology, embrace more automation in their production processes, and support their working capital needs. MIDF will also provide capacity-building programmes such as awareness initiatives, training, and access to global markets to support more SMEs in meeting low-carbon goals. In addition, MIDF will continue engaging with the government and other stakeholders to promote a comprehensive Islamic green finance ecosystem that aligns well with ESG. This email interview was done with MIDF vice-president and head of marketing and business advisory Fadzlan Abu Bakar ( pix ).

“Regular reviews and active promotion of MSPO in international markets, coupled with strong industry commitment and enforcement, will further safeguard Malaysia’s reputation as a responsible palm oil producer and ensure the certification remains effective in the long term,” he said. Replanting rates in Malaysia have remained relatively low, averaging around 2.1%, which is below the optimal target of 4%, with replanting rates among independent smallholders being particularly low at 0.5% between 2020 and 2024. Hence, Ahmad Parveez said the government’s RM1.4 billion allocation over five years, specifically aimed at independent smallholders, is a game changer for the palm oil industry. He said that through financial incentives such as MPOB’s Tanam Semula Pekebun Kecil Sawit 2.0 scheme, it addresses key challenges faced by smallholders like ageing palms and limited access to replanting financing. “By enabling independent smallholders to replace ageing palms with higher-yielding and more resilient planting materials, the programme will boost productivity and increase one of the Top 50 Most Influential Women in Middle East Finance by Financial News UK, part of the Dow Jones Group, and among the Top 15 Women Leaders in the Middle East. Together, the panellists will share valuable insights on how Islamic finance can offer a more resilient, inclusive, and sustainable financial framework for the global economy – reinforcing Malaysia’s role as a thought leader and innovation hub in this sector. What are MIDF’s strategic priorities over the next 3-5 years in advancing Islamic finance for industrial growth? Our strategic priorities include expanding syariah-compliant financing instruments that are tailored to SMEs and mid-sized corporations. We are also focused on digitalising the delivery of Islamic finance through fintech and automated credit assessment tools. At the same time, we are working on mainstreaming ESG within Islamic finance to ensure there is strong alignment between syariah principles and environmental stewardship. We’re actively collaborating with government agencies and industry development partners to scale Islamic-based funding for key sectors like green tech, halal, and the digital economy. Another priority is building capacity and awareness among entrepreneurs so they understand the benefits and mechanisms of Islamic finance for long-term business sustainability. And lastly, we’re broadening market reach for Malaysian halal products and services through targeted collaboration with market-linkers. How do you foresee the evolution of syariah compliant funding tools to better serve SMEs and startups in the digital economy? We foresee the development of more agile, tech-enabled syariah-compliant funding solutions tailored to the needs of digital startups and SMEs. These may include equity-based financing models like Musharakah and Mudarabah that align with startup risk profiles; digital platforms for micro and peer-to-peer Islamic financing to expand access for underserved businesses; data and information processing using blockchain to automate financial decision-making – ensure compliance with governance and enhance transparency in Islamic finance; and flexible working capital and invoice financing structured according to syariah principles to

HOW is MIDF (Malaysian Industrial Development Finance Bhd) leveraging Islamic finance to support Malaysia’s industrial transformation, especially in high growth sectors? MIDF is strategically using Islamic finance as a catalyst to accelerate Malaysia’s industrial transformation, particularly in high-growth sectors such as advanced manufacturing, green technology, the digital economy, and halal industries. Through syariah-compliant financing solutions, we are able to provide ethical, interest-free funding structures that align with Malaysia’s developmental goals. We ensure that our financing supports value creation, technological adoption, and sustainability across industrial ecosystems, contributing meaningfully to the broader goals of the New Industrial Master Plan (NIMP) 2030. Can you elaborate on how programmes like the Halal Accreditation & Technology Improvement (Hati) scheme help SMEs scale and innovate? The Hati scheme is designed to empower SMEs by addressing two critical needs: halal accreditation and technological upgrading. For many SMEs, especially those in F&B, cosmetics, pharmaceuticals, and logistics, getting halal certification can open doors to global Muslim markets. At the same time, upgrading their technology help boost their competitiveness. Through Hati, MIDF has allocated a RM100 million fund to support SMEs in modernising their processes and systems, developing their capacity, and securing the necessary certifications. This is done in collaboration with Halal Development Corporation, Jabatan Kemajuan Islam Malaysia, and other stakeholders. This dual approach help SMEs scale up, automate, and meet international standards, setting them up for innovation and export readiness. With Expo 2025 Osaka on the horizon, how is MIDF planning to showcase its investment o Institution pushes syariah compliant financing to drive green tech, halal, and digital growth under NIMP 2030 Viewing the five-year road map as comprehensive and forward-looking, its director-general Datuk Dr Ahmad Parveez Ghulam Kadir said it aligns closely with the board’s mission to build a resilient, sustainable and competitive palm oil industry. “We welcome the 13MP’s strong commitment to revitalising and modernising Malaysia’s palm oil sector and is committed to collaborate closely with the government, smallholders and industry stakeholders to ensure the successful implementation of these initiatives,” he told Bernama recently. Ahmad Parveez said the board also lauded the government as it emphasises modernisation through mechanisation, automation as well as research and development (R&D). “The focus on advanced technologies such as artificial intelligence (AI), robotics, the Internet of Things (IoT), and precision farming is crucial to boosting yields, improving operational efficiency, and transitioning the sector from labour-intensive to capital-intensive. “These initiatives will help alleviate labour

strategies on the international platform? Expo 2025 Osaka presents a timely opportunity for MIDF to position Malaysia as a global hub for sustainable and Islamic finance. In conjunction with this prestigious international event, MIDF organised a mini forum during the first week of the expo at the Business Hall of the Malaysia Pavilion, titled “The Benefits of Islamic Finance in Supporting a Resilient Global Economy”. (Osaka Expo 2025 is a world expo being held in Osaka, Japan, from April 13 to Oct 13 with the theme “Designing Future Society for Our Lives.”) The forum features distinguished panellists including Madzlan Hussain, senior partner at CSQ Law, a boutique law firm with deep expertise in Islamic finance advisory. CSQ Law has played a key role in expanding the firm’s footprint into Central Asia, serving high-profile clients such as the Astana International Financial Centre, Bakai Bank Kyrgyzstan, the Islamic Development Bank, and the Islamic Corporation for the Development of the Private Sector based in Saudi Arabia. Joining him on the panel is Maya Marissa Malek, CEO and managing director of Amanie Advisors’ global office in Dubai, UAE. A trailblazer in the Islamic finance industry, Maya is widely respected for her visionary leadership and technical proficiency across various domains of Islamic finance including Islamic banking, capital markets, and Shariah governance. With over two decades of international experience, she has received numerous accolades including recognition as

13MP key to Malaysia’s global leadership in sustainable palm oil KUALA LUMPUR: The 13th Malaysia Plan (13MP) offers a vital platform to accelerate Malaysia’s transition towards a climate-resilient, innovation driven future, securing the country’s position as a global leader in sustainable palm oil production, says the Malaysian Palm Oil Board (MPOB) shortages, reduce dependency on foreign workers and strengthen Malaysia’s global competitiveness,” he said. The Malaysian Sustainable Palm Oil (MSPO) certification standard has made significant progress, but to remain relevant and competitive globally, it must continue evolving. “Equally important is increasing smallholder participation by simplifying compliance, providing training and embedding stronger environmental, social and governance (ESG) principles throughout the supply chain.

Ahmad Parveez said key priorities for improvement include aligning MSPO with the world’s most stringent sustainability requirements such as deforestation-free supply chains, full traceability, ethical labour practices and biodiversity protection. “The enhanced MSPO 2.0 aligned with international benchmarks, positions Malaysian palm oil as a high-quality, sustainable and ethical product. “Strengthening traceability is also crucial, through MSPO eTrace 2.0, alongside Sawit Intelligent Management System and GeoSawit, which offer end-to-end supply chain tracking and geo-mapping, reinforcing transparency and appealing to ESG-conscious buyers,” he said. Moreover, to ensure the certification’s longevity and effectiveness, continuous alignment with evolving market demands is essential as this could be achieved by leveraging advanced technologies such as the IoT, blockchain, and big data analytics to enhance monitoring and verification, said Ahmad Parveez.