Sharia finance should prepare to face AEC

Jakarta (ANTARA News) - Deputy of the Board of Commissioners of the Financial Services Authority (OJK), Rahmat Waluyanto, said the Islamic finance industry should prepare for a new era, a time when the economy is growing very slowly and people are more selective in their shopping habits.

"In the new normal era, when the economy slows and consumers cut their spending, the Islamic finance industry should prepare to adapt appropriately to survive and continue to develop," Rahmat said, at the opening of the International Islamic Finance Conference here on Thursday.

In the meantime, the authority should continue to develop the Islamic finance industry, and focus on improving the capacity of human resources in the Islamic finance sector.

In addition, the authority also encourages the creation of innovative Islamic financial products to deepen markets, improve access to Islamic financial institutions, and assist Islamic financial consumers.

The authoritys data indicates that amid a slowdown in world economic growth, Indonesias Islamic finance industry continues improving.

The market share of the Islamic banking industry to the national banking industry shows an increase, compared with the previous year, rising from 4.6 percent in July 2015 to 4.81 percent in July 2016.

Further, the market share is expected to reach 5.13 percent, with assistance from the Aceh Development Bank, which has converted into an Islamic commercial bank.

In line with the development of the expanded market share, Islamic banking assets have increased from 18.49 percent, Rp272.6 trillion, to Rp305.5 trillion.

This increase has been driven by third-party funds, representing 12.54 percent, from Rp216 trillion to Rp243 trillion. The funds have prompted finance portfolio growth by 7.47 percent, from Rp204.8 trillion to Rp220.1 trillion.

Meanwhile, the sharia non-bank financial industry, based upon total assets, has risen by 23.18 percent to Rp80.1 trillion.(*)