Malaysia is embarking on a new phase of Islamic economic leadership, focusing on innovation in finance, digital sukuk initiatives, and expansion of the halal industry under the Peneraju Ekonomi Islam agenda.
During the tabling of Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim stated that Islamic finance must evolve beyond conventional structures to meet modern demands and provide sustainable solutions for the ummah. He emphasised that Islamic finance cannot remain bound by tradition but must lead with forward-thinking, solution-based instruments suited to today’s realities.
To support this shift, the government is promoting risk-sharing financing models such as musyarakah, murabahah, and blended finance. These models are intended to enhance inclusivity and social impact across various sectors of the economy.
Malaysia’s halal ecosystem will also be significantly strengthened. The Department of Islamic Development Malaysia (JAKIM) will accelerate the halal certification process, while the Halal Development Corporation (HDC) will step up efforts to ensure better compliance among companies. To support halal-related small and medium enterprises (SMEs), SME Bank will allocate RM100 million in dedicated financing. At the same time, Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will increase its government guarantee facility for halal business financing to RM2 billion.
A major infrastructure boost will come from the development of the Perak Halal Industrial Park in Manjung, with an investment of RM124 million. This project will further Malaysia’s ambition to become a global hub for halal production and trade.
In the area of digital finance, the Labuan International Business and Financial Centre (Labuan IBFC) will be developed into a Digital Islamic Finance Hub. This transformation includes the Global Sukuk Tokenisation Initiative, which aims to digitise sukuk and enable transparent trading on retail digital exchanges within Labuan IBFC.
To support environmental initiatives, the government will also introduce Climate Sukuk, a new financial instrument to fund green projects. These sukuk will provide returns in the form of carbon credit dividends, aligning Islamic finance with global sustainability goals.
The government’s iTEKAD blended finance programme will be expanded through RM35 million in matching funds. This initiative will focus on helping vulnerable groups improve their skills and secure more stable, higher-income employment opportunities.
The MADANI Wakaf framework will also be strengthened to transform waqf (endowment) assets into productive, community-based investments. UDA Holdings Bhd will lead several major wakaf development projects in Penang, including Taman Wakaf Seetee Aisah (Phases 2 and 3) and Taman Sultan Sallehuddin (Phases 1B and 2B), with combined investments of nearly RM250 million.
In addition, a tokenised cash wakaf sukuk will be launched to finance essential social infrastructure, including special education facilities, autism centres, and palliative care institutions. This innovative funding model will allow individual contributions to be converted into long-term, sustainable investments for community benefit.
Overall, Malaysia’s Islamic economy agenda marks a decisive move toward innovation-driven finance, impactful wakaf development, and a strengthened halal ecosystem. These initiatives reaffirm the country’s leadership in the global Islamic economic landscape.