The link between Islamic finance and the halal economy should be strengthened, said Nazeem Noordali, Chief Operating Officer of the International Islamic Trade Finance Corporation (ITFC), during his speech at the session titled “Strategic Leadership Dialogue on Ethical Halal Business Models and Risk-Resilient Financing” held as part of the Islamic Development Bank (IsDB) Group Annual Meetings in Baku, APA reports.
“Today, the halal economy is becoming one of the major economic sectors. Its size is estimated at approximately $2.35 trillion. At the same time, the assets of the Islamic finance sector stand at between $5.5 trillion and $6 trillion and are expected to grow further in the coming years,” he noted.
He stated that despite the rapid development of the halal economy, there is still a significant mismatch between Islamic finance and the real economy.
“We do not see the expected synergy between the strength of Islamic finance and the needs of the halal economy. Businesses operating in halal food, pharmaceuticals, tourism and other sectors are not being financed at a sufficient level,” Noordali stressed.
According to him, OIC member states should play a more active role in the development of the halal economy, particularly by expanding access to finance for small and medium-sized enterprises.
“Small and medium-sized enterprises need not only financing, but also capacity building and institutional support so that they can benefit from the opportunities created by the global halal market,” he noted.
Noordali stated that one of the main obstacles to the development of the halal economy is the lack of financing.
“According to estimates by the Asian Development Bank, the trade finance gap exceeds $2.5 trillion. This shows that a significant amount of economic potential remains unrealized,” the ITFC official emphasized.
He added that closer cooperation should be established among governments, financial institutions and the business sector, and innovative financing solutions should be developed, particularly for small businesses facing challenges related to collateral, access to finance and governance.
“A bridge must be built between Islamic finance and the halal economy. Strengthening this link will contribute both to the growth of businesses and to the sustainable development of the global halal economy,” Nazeem Noordali said.
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