The Role of Islamic Financial Technology in Fostering Digital Financial Inclusion: The Malaysian Experience as a Model (Review of Futures Markets)

Summary

• World Bank data shows that 1.4 billion adults worldwide lack bank accounts, while approximately 1.1 billion of them own mobile phones.p.1
• The global transaction volume of Islamic Fintech was estimated at $138 billion in 2022/2023 and is projected to reach $306 billion by 2027, growing at a CAGR of 17.3%.p.3
• Over 417 Islamic Fintech companies operate globally, with six core OIC countries accounting for 85% of the global market volume.p.3
• In Malaysia, digital economy activities contributed 20% to national GDP in 2020, reaching MYR 289 billion in 2019.p.5
• Mobile e-payment transactions in Malaysia increased by 31.5% in 2022 to reach 9.5 billion transactions, with per capita e-payments hitting 343 in 2023.p.5
• Digital remittance transactions in Malaysia expanded by +106% in 2022 to reach $5.54 billion.p.6
• Malaysian micro-financing and supply chain fintechs demonstrated high adoption, with CapBay funding MYR 2.5 billion across 1,600 SMEs by August 2023.p.6

Key insights

1. Top driver markets Saudi Arabia, Iran, Malaysia, UAE, Indonesia, and Kuwait each exceed $5 billion in market size and collectively account for 85% of global Islamic Fintech volume.p.3
2. Indonesia leads global regional hubs in Islamic Fintech company count with 61 companies, representing 20% of tracked major markets.p.3
3. Fundraising, deposits, lending, wealth management, payments, and alternative finance comprise 77% of all global Islamic Fintech activities.p.4
4. Malaysia maintains internet banking penetration at 98% and bank account ownership at 92%.p.5
5. The Malaysia Co-Investment Fund expanded its capital pool to MYR 300 million ($65.34 million) to back P2P and equity crowdfunding.p.6
6. Digital wealth management assets in Malaysia reached MYR 1.6 billion across 1 million accounts in 2024.p.6
7. StashAway Malaysia manages over MYR 1 billion in assets under management across more than 50,000 clients.p.6
8. P2P micro-financing platform microLEAP funded 27 projects totaling MYR 75.4 million as of August 2023.p.6