Malaysia’s Central Bank Governor Urges Islamic Finance to Back Key Industries

Bank Negara Malaysia Governor Abdul Rasheed Ghaffour urged financial institutions to direct more Islamic finance toward manufacturing, technology and other priority industries, saying current financing patterns do not match the investment needed to build globally competitive sectors.

At the Financial Institutions’ Directors Education Forum in Kuala Lumpur on Sept. 24, Ghaffour called for stronger expertise in evaluating newer business models, financing structures suited to different risks and longer-term projects, and closer coordination among investors, public agencies and technical partners.

Islamic banking’s share of Malaysia’s total financing rose from 25% in 2015 to 48% in 2026. The country’s Islamic capital market grew from RM420 billion to RM670 billion over the same period, with a market share above 60%.

Despite that growth, financing approvals remain concentrated in services, while manufacturing financing remains limited relative to the investment needed to develop globally competitive industries.

Ghaffour linked the sector’s role to the 13th Malaysia Plan, which covers 2026–2030, as well as the New Industrial Master Plan 2030, National Semiconductor Strategy, National Energy Transition Roadmap and Halal Industry Master Plan 2030. He called on financial institutions to help direct capital toward Malaysia’s development priorities.

“Are we still financing yesterday’s economy, or are we positioning ourselves for the next one?” Ghaffour said.