Malaysia is considered the undisputed leader in the global Islamic finance arena. Malaysia commands a significantly higher marketshare of global Sukuk issuance compared to its closest competitor Saudi Arabia. Malaysia’s Islamic finance industry is market-driven, with strong and continual government commitment. The role of women in Malaysia’s banking industry is noteworthy. Here is a look at how the involvement of women in every level of Malaysia’s banking hierarchy is enriching the nation.
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Malaysia As A Center Of Islamic Banking
Malaysia has adopted a dual banking system wherein Islamic and conventional banks operate side by side. The Interest-free Banking Scheme (IFBS) was launched in March 1993. It allowed conventional banks to offer Islamic banking products and services. A Sukuk is an Islamic financial certificate. It is roughly equivalent to a bond in conventional (ribawi) banking. Sukuk complies with the religious law which governs Islamic banking, broadly known as Sharia. Sukuk links the returns of a debt to a specific asset being purchased. This way, investors can bypass the prohibition (riba or interest) under Sharia, making debt financing viable.
Moody’s revealed that Malaysia had a 32% share of the Sukuk market in 2020, followed by Saudi Arabia with a 28% share. Malaysia also continues to be the largest market for takaful (a type of Islamic insurance) in ASEAN. Malaysia has 16 Islamic banks including 5 foreign banks. Total Islamic banking assets in Malaysia in 2018 amounted to MYR 490 billion (USD 119 billion). Islamic banking accounts for 21% of all banking in Malaysia.
Women In Malaysian Banking
Vast communities of Malaysian migrants live and work in the US and elsewhere around the world. These expat professionals regularly transfer money back to Malaysia as remittances. The achievements of resident Malaysians are equally noteworthy. Former Prime Minister of Malaysia, Najib Razak launched the 30% Club in May 2015. This is an association committed to bringing more women into corporate boards. Since 2000, women in Malaysia have assumed leading roles in finance. Today Malaysia has a higher percentage of female investment bank chiefs than any other country. Shabnam Mohammad, Head of Structuring at MENA and Group Head of Islamic Finance at Tell Group, says that Malaysia is very open to women’s professional progression. Mohammad explained that the concept of the glass ceiling is real, but not universal. Islamic finance is a relatively nascent industry. The progress it has made compared to conventional banking is significant.
The Impact Of Women In Banking
The World Bank found that publicly traded companies in Malaysia with female board members were more profitable than companies with all-male boards. In March 2021 Malaysian Prime Minister Tan Sri Muhyiddin Yassin said that a 30% increase in the participation of women in the labor market can increase the country’s GDP by 7-12%. The Malaysian government has created policies to improve women’s representation in leadership roles. The goal is to to overcome gender bias. In its 2020 budget the government declared that maternity leave would be increased from 60 days to 90 days. A 1-year tax exemption was given for women returning to work after career changes. Malaysia’s department of statistics reported that as of 2019 the female labor participation was at 55.8%.
Malaysia’s Chief Statistician said that the Malaysia Gender Gap Index (MGGI) was at 70.9% in 2019. The MGGI identifies the gap between women and men over 4 sub-indices. These measure economic participation and opportunity, educational attainment, health and survival, and political empowerment. A score of 100% indicates perfect parity.
In March 2021 the Malay Mail reported that the number of women holding senior leadership positions in Malaysia had increased to a record-high of 37%. Women in operational executive-level management (C-suite) roles in Malaysia has increased year-on-year. Women are increasingly filling key roles such as Chief Finance Officers, Chief Marketing Officers, and Chief Information Officers. Malaysia has proven that it takes the matter of women’s empowerment seriously. The country is a role model for many developing countries to emulate.
About the author:
Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.