IILMC explores Azerbaijan's great potential in Islamic finance development

BAKU, Azerbaijan, June 17. Azerbaijan has great potential in the development of Islamic finance, CEO of the International Islamic Liquidity Management Corporation (IILMC), Mohamad Safri Hamid, said, Trend's correspondent reports from the event.

Hamid made the remark at the panel titled "CEO's session on making regional integration attractive for investment: promoting trade, mobilizing investment and systematically de-risking growth" held within the framework of the 51st Annual Meeting of the Islamic Development Bank (IsDB) Group in Baku.

He compared the current size of the Islamic finance sector to the global financial system, saying it still has a very small share.

The CEO noted that although the volume of Islamic finance has reached about $5 trillion, this figure is less than 1% of the global financial system.

"We should be happy, we should celebrate the increase in Islamic finance from $1 trillion in 2010 to $5 trillion today. But this is still not even 1 percent compared to the global financial system. This is a drop in the ocean," he said.

According to him, although the Islamic finance system has developed over the past 50-60 years, it still has significant expansion potential, and international cooperation in this area is important.

Hamid stressed that Azerbaijan and Central Asian countries in particular should play a more active role in this process.

"We need Baku, Azerbaijan, and Central Asia. If we do not help ourselves, no one will help us," the CEO explained.

He added that it is unrealistic to rely on Western countries for the development of the Islamic financial market, and integration within the sector is essential.

"We cannot rely on Europe and the United States to support the development of Islamic finance. Therefore, we need to build our own Islamic finance ecosystem," he said.

Hamid also emphasized the importance of political and institutional support from countries, citing the Malaysian experience as an example. According to him, the share of Islamic finance in Malaysia, which was 5% a few decades ago, has now increased to 40-50%.

In conclusion, he noted that the current level of Islamic finance - especially in Central Asia and Azerbaijan, which is about 4% - indicates great development potential.

"In fact, the whole path is upwards. The main issue is cross-country integration, the development of secondary markets and standardization," the CEO pointed out.