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Islamic finance needs a boost from real sector: BI
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The logo of Bank Indonesia adorns the main gate of the central bank's headquarters in Jakarta. (Antara/File/-)
T
he country’s Islamic banking industry needs a jump-start from the real sector to get out of the current slowdown, a Bank Indonesia (BI) official has said.
BI deputy governor Erwin Rijanto said as of August the industry grew only 8 percent, in contrast to the 40 percent average-annual growth in assets the industry had from 2008 to 2013.
"Sharia banking has exhausted its previous high growth. We are in a consolidation period right now. To jump start [the industry] again, it cannot rely on support only from within the financial industry," Erwin said in a press conference during the Indonesia Sharia Economic Festival (ISEF) in Surabaya, East Java, on Thursday.
He said BI now had intensified the financial inclusion of small and medium enterprises (SMEs) in various sectors, including Islamic fashion, halal food and haj travels in order to support sharia banking.
The central bank also had forged partnerships with over 22,000 Islamic boarding schools, or pesantren, across the country to help expand the sharia banking customer base.
"We have begun to provide students with e-money and have introduced branchless banking agents at pesantren," Erwin said.
BI also has launched several business incubator projects at the schools to allow campus businesses to access sharia banking loans. (dmr)
