| By NST

The Expanding Reach of the Halal Economy

The global halal economy is undergoing a rapid shift, moving beyond its traditional geographic and sectoral boundaries. What was once concentrated mainly in Muslim-majority regions is now reshaping trade, investment, and consumer patterns across Asia, the Middle East, Europe, and increasingly Africa and Latin America.

Halal has also evolved far beyond food and beverages. It now represents a multi-trillion-dollar ecosystem that spans pharmaceuticals, cosmetics, tourism, logistics, and a fast-growing digital and e-commerce landscape.

A Critical Question for Islamic Finance

As the halal economy accelerates, an important question arises: is Islamic finance evolving fast enough to drive this global expansion, or does it still lack the scale and agility needed to meet rising demand?

This question is particularly relevant as the halal market becomes more global, digitally integrated, and complex, requiring financial systems that can support cross-border trade, innovation, and SME growth.

Malaysia at a Strategic Crossroads

Malaysia, widely recognized as one of the world’s most mature Islamic finance jurisdictions and a pioneer in halal governance, now stands at a strategic inflection point. Its reputation as both a leading Islamic finance hub and a well-established halal ecosystem places it in a unique position to influence global standards, capital flows, and international market linkages.

According to Maybank Group’s Chief Executive Officer for Islamic Banking and Maybank Islamic Bhd, Mohamad Yasin Abdullah, the rapid growth of the halal economy is increasingly testing whether Islamic finance—domestically and globally—has scaled sufficiently to support this expansion.

Regulatory Strengths and Global Market Access

Malaysia’s robust Islamic finance regulations, internationally recognized halal certification framework, and active halal SME ecosystem have long made the country a reference model for aligning religious governance with commercial viability. With halal exports approaching RM60 billion, Malaysia remains a major global player.

Certification by the Department of Islamic Development Malaysia (JAKIM), recognized in more than 80 international markets, strengthens Malaysia’s ability to capture growing demand from ASEAN, GCC countries, and China. This demand is expected to rise further as the global Muslim consumer market expands to an estimated US$2.8 trillion by 2025.

Structural Gaps Facing Halal SMEs

Despite these advantages, structural challenges remain. Halal SMEs, widely regarded as the backbone of the halal food industry, often face difficulties accessing Shariah-compliant financing at scale. Cross-border halal trade also continues to be constrained by regulatory inconsistencies, fragmented certification standards, and logistical hurdles.

These gaps highlight the need for Islamic finance not just to participate in the halal economy, but to lead it through scalable, innovative financial solutions that align with the sector’s increasingly global footprint.

Strengthening MSMEs Beyond Conventional Financing

Malaysia is home to approximately 1.2 million micro, small, and medium enterprises (MSMEs). While around 200,000 individuals are involved in the halal industry, only 11,737 businesses are JAKIM-certified, including 5,047 Maybank customers. This disparity has encouraged Maybank Islamic to move beyond traditional banking approaches in supporting halal enterprises.

Over the past two years, the bank has expanded its portfolio of financial and non-financial services tailored to halal-focused MSMEs. A key initiative is the Halal Facilitation Programme, which includes a digital halal readiness assessment tool based on JAKIM certification guidelines to help businesses prepare for certification.

Digital Platforms as Growth Enablers

Maybank Islamic views faster MSME growth as dependent on making halal certification more affordable, efficient, and SME-friendly, supported by advisory services, financing access, and digital tools.

In October 2024, the bank launched Salaam Market, Malaysia’s leading B2B halal e-commerce platform, in collaboration with Macro Tech Ventures Sdn Bhd (Borong). The platform enables entrepreneurs to source halal-certified products in bulk at competitive prices while benefiting from low transaction fees.

To date, Salaam Market has onboarded approximately 7,500 buyers and sellers, with total transactions reaching RM7.5 million. The platform has also expanded into Singapore, connecting buyers there with halal-certified Malaysian products and ingredients within a trusted, Shariah-compliant digital ecosystem.

Building an Integrated Halal Ecosystem

Looking ahead, Salaam Market is envisioned as a regional platform that facilitates trade, improves access to financing, and provides halal certification guidance across key markets, creating value throughout the halal supply chain.

These efforts are supported by complementary initiatives such as the Halal4Ward programme, which offers integrated banking and beyond-banking services, and the Halal2u Maybank Islamic portal, which centralizes halal-related support for entrepreneurs.

Financing Impact and Long-Term Vision

Maybank Islamic offers specialized financing options for eligible halal businesses, including working capital, property financing, and start-up funding. Since January 2023, the bank has disbursed RM2.3 billion in financing to 4,695 customers.

Following the launch of the Halal2u initiative in September 2023, 2,806 customers expressed interest in the Halal Facilitation Programme. Of these, 696 received structured guidance, and 217 successfully submitted their halal certification applications.

Islamic Finance as an Economic Enabler

Mohamad Yasin emphasized that the long-term goal is to build a resilient, inclusive, and digitally enabled halal ecosystem that empowers MSMEs to grow and contribute to the wider Islamic economy at regional and global levels.

He stressed that Islamic finance must actively shape economic activity rather than simply support it. Achieving this vision requires stronger collaboration among government agencies, regulators, financial institutions, and halal industry stakeholders. Harmonizing halal standards across borders, developing MSME-focused financial solutions, and leveraging technology for efficiency will be essential for sustaining long-term growth.

Ultimately, Islamic finance must evolve from a peripheral player into a central driver of a globally integrated and competitive halal economy.

Original Article:

New Straits Times. (2025). Powering the global halal economy. https://www.nst.com.my/amp/news/nation/2025/12/1339938/power%C2%ADing-global-halal-eco%C2%ADnomy