Malaysia’s Islamic Finance Penetration Likely to Reach BNM’s 40% Target in 2020: RAM Ratings

Bank Negara Malaysia set a target in its Financial Sector Blueprint 2011-2020 for Islamic financing in the country to reach 40% of the total banking system’s loans/financing by 2020, from a rate of 29% in 2010.

RAM Ratings Co-Head of Financial Institutions’ Ratings, Wong Yin, stated that Malaysia was well on track to achieve this target. Preliminary data released by Bank Negara Malaysia indicated that the penetration rate of Islamic financing in the country, including that of developmental financial institutions, had reached 39.9% as at the end of June 2020, up from 39.2% reported at the end of 2019.

The penetration of Islamic finance in Malaysia continues to increase,...