Moving forward in the new era of business

Special contribution from CIMB Islamic

The global pandemic has had a considerable impact on all aspects of our lives. Businesses of all sizes have had to deal with the ever-changing environment where many were forced to adapt, change or diversify. Some businesses could not react to the socio and economic changes in a timely manner and had to close down for good. Governments across the globe have had to set up emergency task forces and councils to ensure the lives and livelihood of people and businesses are best protected. Many changes had to be made to survive and triumph in the ‘new normal’ as we know it.

However, in the face of such adversity, the Malaysian economy has shown commendable resilience, growing by 7.1% in the first half of 2021. Disruptions in global supply chains in many parts of the world forced various industries to reinvent themselves. With enhanced digital transformation and increased government focus on vaccinations, more economic sectors are to re-open. These concerted efforts have helped jumpstart the country’s economy.

The global Islamic economy remains on a strong growth trajectory as it primarily serves a large and growing global Muslim population. As the world becomes more concerned with environmental impact, responsible business practices, quality assurance and wholesomeness, halal products and services become more relevant to both Muslim and non-Muslim consumers. Halal products and services now represent quality assurance, hygiene, and an ethical way of conducting business. We shall continue to build on this to bring the halal and green economies closer, as indeed, there are many commonalities between both.

The Malaysian Government has set the global standards for creating a successful halal economy, from a robust Islamic banking and finance industry to all-inclusive halal certification standards and policies. Through these efforts, Malaysia tops the world—for the ninth year running—in the Global Islamic Economy Indicator, according to the State of the Global Islamic Economy report.  

According to the 12th Malaysia Plan (12MP) recently unveiled by the Economic Planning Unit (EPU), the halal industry is expected to contribute 8.1% to the country’s gross domestic product and generate RM56 billion export revenue in 2025 as compared to RM30.6 billion in 2020. This is to be achieved through measures to enhance the halal industry’s capacity and capability by uplifting the development of halal talent, establishing halal professional recognition, accelerating industry development, including Bumiputera participation, increasing product competitiveness and positioning Malaysia as a global halal hub.

This development will be anchored through enhanced collaboration, competitiveness, and innovation in various sectors within the larger halal industry while positioning Malaysia as a global halal hub in which CIMB as a whole would play its part.

CIMB’s HalalBizReady is a proposition that aims to prepare Small and Medium Enterprises (SMEs) to grow their businesses and excel in the international halal markets. HalalBizReady offers step-by-step guidance and financing solutions to help companies navigate through the stringent guidelines of halal certification, whether by getting their premises, operations, or supply network to meet the requirements. SMEs can also benefit from CIMB’s knowledge partners who provide guidance and training with the objective of producing competitive products and services in international markets. 

Through HalalBizReady, SMEs will gain access to a wider global and regional market via the CIMB Trade Club Alliance. This platform is an exclusive digital e-commerce ecosystem with 14 global banks with a presence in more than 50 countries as its members, with active business matching supported by the leading banks in the respective economies.

More importantly, this platform is not only an outbound solution but one where international industry players can reach out to us for assistance to tap and maneuver around our domestic halal ecosystem with ease. 

CIMB Islamic is committed to supporting business resiliency and innovation in the face of significant change. The pandemic has created a greater appreciation for the planet we live on. CIMB Islamic keeps sustainability a key mantra in seeking business-driven solutions that enable people and the planet to thrive. In this regard, a cooperation initiative between Malaysia External Trade Development Corporation (MATRADE), Malaysian Green Technology and Climate Change Centre (MGTC), and CIMB Islamic to develop a green exporters framework was recently formalized to support the Malaysian SMEs in the transformation and adaptation to the new norm. This will lay the foundations for Malaysia’s leadership in the burgeoning green economy in the post-COVID-19 era. 

Apart from our initiatives to develop SMEs, CIMB Islamic is also advancing our retail propositions with a suite of innovative Shariah-compliant products serving millions of customers. The EcoSave Savings Account–i is a product embedding environmental protection and conservation. No paper statements, passbooks, or mailers, while the bank will contribute 0.2% of the average portfolio balance to support environmental conservation initiatives. We have disbursed close to RM3 million from this commitment for such projects across Malaysia and have committed to an additional RM1.5 million minimally in 2022.

The bank is harnessing the power of digitalization with the launch of the OctoSavers Account-i recently, the first fully digital Shariah-compliant digital savings account which provides customers with complete account onboarding digitally, via the use of electronic Know-Your-Customer (“e-KYC”), saving customers from the need to step into a branch.

In the capital markets space, CIMB Islamic’s sukuk capabilities are highlighted in our roles in the issuances of the Government of Malaysia’s notable dual-tranche US$1.3 billion Sukuk Wakala offering where the 10-year US$800.0 million sustainability tranche was the world’s first USD sustainability sukuk offered by a sovereign, as well as the Government of Indonesia’s US$3.0 billion global sukuk offering—including a US$750.0 million green sukuk tranche—the first-ever 30-year and longest-tenured green sukuk issuance globally.

CIMB Islamic is playing an active role in the progress of the Islamic finance industry, guided by the principles of Value-Based Intermediation, resulting in practices and offerings that generate a positive and sustainable impact on the economy, community and environment. We are pleased to have made a difference in the lives of our customers and communities in Malaysia and beyond.