Halal Issues in the Global and Malaysia

Abstract

In Malaysia, the halal industry has issues with insufficient SME financing (Dagang Halal, 2018). Several halal businesses have been identified as non-shariah compliant by Shariah screening bodies, owing to their use of conventional financing facilities. There is a financing vacuum for halal companies to be filled by Islamic financial entities with Islamic financing products and services, such as liquidity management, risk management or hedging, capital, investment, working capital, trade finance, and funding (WIEF, 2015). Islamic finance is the right institution for directing surplus funds into dynamic investments and walking into the value chain within the halal economy (MIFC, 2014). Figure 1.1 below illustrates examples of financial needs among halal industry players: