Several Muslim-dominated countries are taking notice of Islamic pension funds for investment purposes. The success of these kinds of investor capitalization can help the growth of asset management markets in Asia and the Middle East.
Many pension plans operating around the world are backed up by state funds. Many countries though are trying to develop these sectors as a way to expand their financial market. As seen from the developments in Malaysia, Pakistan and Turkey, there are clear signs that Islamic finance can be one of the cornerstones of these developments.
According to consultants Ernst & Young, if state backed pension funds in Islamic dominated markets invested a part of their funds for sharia compliant instruments, there is an estimated USD160 billion and USD190 billion expansion in funding available for the sector. This was reiterated by Ernst & Young Islamic Financial Services Leader Ashar Nazim, who said, "So you've got pent-up demand - your challenge is how to create a supply-side mechanism to cater to that latend demand."
Join the Conversation