KUALA LUMPUR: Ever since the US housing bubble burst in 2007 leading to the collapse of the global financial system last year, investors have been scurrying to seek alternative investment platforms and Islamic finance is deemed to be one of the viable and attractive options.

Aware of the huge potential in Islamic finance, Malaysia had been preparing the groundwork for a couple of decades and is now poised to become a global Islamic finance hub. Regional fund managers and investors are keeping a keen eye to take advantage of the vast opportunities available here.

It has been reported that Islamic banking assets in the Asia-Pacific account for about US$450 billion (RM1.62 trillion), which is 60% of the global Islamic banking market. The numbers are expected to grow.

According to reports, the Malaysian Islamic finance sector has grown at a compound annual growth rate (CAGR) of 28% in the last 15 years.

As at end-November 2008, the country’s Islamic banking assets rose 18.7% year-on-year (2007: 19.2%) to RM186.6 billion (2007: RM157.2 billion) and accounted for 14.3% (2007: 12%) of total assets in the banking sector.

Bank Negara Malaysia (BNM) wants the Islamic banking industry to constitute 20% of the overall banking and insurance market by 2010.

For more on this article, please click on the following link: Islamic finance in the limelight: The Edge