THERE is a need to invest in alternative and viable options for syariah-compliant financing, community development banks and sukuk to drive the halal industry’s future growth.

       Such investments will spur a host of initiatives that are designed to help micro, small and medium enterprises (MSMEs) that are in need of financing support and assistance, says Halal Development Corp Bhd (HDC) chief executive officer Hairol Ariffein.

       In his closing speech at the virtually-held Securities Commission Malaysia-HDC forum on syariah-compliant fundraising for MSMEs yesterday, he highlights the need for a mechanism that would act as a guideline for ethical investment in the halal industry, while simultaneously enabling the Islamic capital markets’ growth.

       “There should be a dedicated mechanism to provide guidance in screening the syariah status of unlisted MSMEs for equity crowdfunding (ECF) and peer-to-peer (P2P) financing platform operators and syariah advisers.

       “As the halal industry faces challenges due to the lack of funding, this initiative will certainly be the solution and crutch to provide MSMEs with the required financial backing,” he says.

       Hairol adds that the Islamic financial services should be fully optimised by the halal industry sectors, and notes that the groundwork to create awareness on the Islamic capital markets’ offerings has begun.

       “This is expected to generate a never-seen-before level of investment opportunities and syariah-compliant halal companies in the country.

       “We strongly believe that the linkages created in the halal sector will help enhance the ecosystem for syariah-compliant fundraising activities, particularly in the market-based financing segment, as well as addressing obstacles and issues faced by MSMEs regarding funding accessibility,” he adds.

       The Securities Commission has launched a toolkit to provide guidance on screening the syariah status of unlisted MSMEs for ECF and P2P financing platform operators and syariah advisers, which industry players say could potentially draw more investor interest.

       According to ECF platform operator pitchIN CEO Sam Shafie, there is huge demand for syariah-compliant companies. PitchIN expects to raise RM10mil for five to 10 syariah-compliant companies within the first year after the introduction of the toolkit. — Bernama