Evolution of Islamic Banking and Finance towards Halal Development in Malaysia

Abstract

Islamic finance and halal industry are two Islamic sectors that provide important services to the community. However, the highlight of the literature found studies linking Islamic finance and the halal industry is very minimal. Naturally these two industries are very significant to the people of Islam. The Islamic financial industry provides banking services and finance for individuals and businesses. Meanwhile, the halal industry produces goods and services based on Shariah to Muslims. Since the role of these two industries is so significant in the daily life of a Muslim, and the government's aspiration towards becoming the Halal Hub of the World, then these two industries should cooperate with each other to increase the level of Shariah compliance and subsequently produce the best goods and services for Muslims based on Sharia as a whole. Halal industry has a very important responsibility to ensure its value chain includes independent financial financing from riba. Therefore, this paper mediates the important role of Islamic finance for development of the halal industry in Malaysia.