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Islamic financing alternative funding for infrastructure: Maybank
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A Waskita Beton Precast employee works on concrete molds to meet rising demand for infrastructure projects at the company's plant in Karawang, West Java, on Oct. 3, 2015. (JP/Donny Fernando)
L
ender Maybank Indonesia has called on the Indonesian government to promote Islamic financing as an alternative funding to boost infrastructure projects in the country.
Maybank Indonesia president director Taswin Zakaria said infrastructure projects covered tangible assets such as land and equipment that could be securitized for Islamic financing such as sukuk.
"We view Islamic financing as an alternative, not a substitute, that can be used simultaneously with conventional financing […] We’re looking to finance more government projects using Islamic loans," he said during Maybank's Invest ASEAN 2016 event on Wednesday in Jakarta.
Islamic financing, he further said, would attract money from the Islamic world, such as from Middle Eastern investors in Indonesia as the infrastructure projects were mostly supported by the government.
Maybank's sharia unit, Maybank Syariah, disbursed 80 percent of its Rp 10.8 trillion (US$817.25 million) loans in the first half of 2016 to the infrastructure sector. However, it is currently struggling with unsafe gross non-performing financing (NPF) of 5.58 percent.
Along with bank loans, the lender through Maybank Kim Eng Indonesia boosted Islamic financing in Indonesia last year by arranging sukuk totaling Rp 6 trillion (US$ 454 million) issued by big companies such as XL Axiata, Tiga Pilar Sejahtera Food and Maybank Indonesia itself. (ags)
