Indonesia is looking to grow sharia finance, banking on its Muslim-majority population.
ndonesia recently launched its largest sharia bank, Bank Syariah Indonesia (BSI), as it seeks to develop the country into a sharia finance hub.
The government of the world’s largest Muslim-majority country has been looking to develop its sharia economy since establishing the Indonesian Sharia Economy Master Plan 2019-2024 for becoming a prominent player in the global sharia economy.
Despite the ambitious plan, information on Islamic banking and finance has been generally lacking for consumers. According to the Financial Services Authority (OJK), Indonesia’s sharia financial literacy rate was a mere 8.93 percent in 2019, far below the conventional financial literacy rate of 37.72 percent.
Experts still maintain that sharia banking has potential to grow and even support the country’s larger halal economy.
Read also: Sharia finance thrives despite pandemic, to further grow in 2021: OJK
What is sharia banking?
Law No. 21/2008 on sharia banking defines it as a banking system that is based on the principles of sharia, or Islamic law, and is regulated under a series of fatwas issued by the Indonesian Ulema Council (MUI).
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.
Quickly share this news with your network—keep everyone informed with just a single click!
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Get the best experience—faster access, exclusive features, and a seamless way to stay updated.