Malaysia wins in Islamic finance but its tech start-up ecosystem | Digital Asia

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A woman browses the Internet at a cyber cafe in Kuala Lumpur June 15, 2011. REUTERS/Bazuki Muhammad

Malaysia’s developed Shariah-compliant infrastructure and draws in fintech start-ups even though it is not a global technology hub like neighbouring Singapore.

Dr Farrukh Habib, a researcher with Kuala Lumpur’s International Shariah Research Academy for Islamic Finance (ISRA), whose academic interests include fintech, believes Islamic fintech holds some promise for Malaysia, but only if authorities keep their eye on the ball and find ways to coax new entrepreneurs to their jurisdiction. He stresses it is starting from a very low base.

“Although has been focusing on being the leader in Islamic finance, in technology terms I haven’t seen much progress from the authorities,” he told Salaam Gateway. “There’s been a lot of talk but we haven’t seen many initiatives on the ground to promote this.”

In this respect, Malaysia may have the Islamic finance part of the equation but not enough of the start-up ecosystem.

In the State of Southeast Asian Tech Report 2018, which surveyed more than 100 leading figures in the technology industry in six regional countries, half of respondents said they would choose Singapore if they were to launch a new tech company in the region, with Malaysia coming a distant second. Over a quarter said access to capital and quality of a jurisdiction’s ecosystem would inform their decision on where to locate. Regulatory ease of doing business was a distant second.

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