President Jokowi hopes Indonesia to become shariah financial center

President Jokowi hopes Indonesia to become shariah financial center

President Joko Widodo (Jokowi). (ANTARA/Andika Wahyu)

We indeed need to pay attention to the shariah financial service sector."
Jakarta (ANTARA News) - President Joko Widodo (Jokowi) has expressed hope that Indonesia will become a shariah financial center in view of the countrys huge potentials.

"I hail the launch of the campaign. We indeed need to pay attention to the shariah financial service sector. It has grown fast but the growth is not yet maximal with regard to the existing potentials," he said at the launching of "I Love Shariah Finance" campaign initiated by the Financial Service Authority (OJK) here on Sunday.

The President said if the huge potential is developed it is not impossible the country will become the development center of shariah finance.

"Our country is a country with the worlds biggest micro-finance, the only country that issues a retail shariah bond and if it develops later it could make the country become an international shariah financial center. The key to achieving it is improving public knowledge sustainably," he said.

OJK chairman Muliaman D Hadad said that although the shariah finance has grown fast it is still relatively small compared to other national financial services.

He said 12 shariah general banks with 22 shariah units in the country are owned by conventional banks and 163 shariah BPRs (local banks) with total assets worth Rp264.81 trillion and a market share of 4.88 percent.

The number of players in the non-shariah financial industry totals 98 outside LKM (community financial institute) consisting of shariah insurance with a total asset of Rp23.80 trillion, shariah financing business with a total asset of Rp19.63 trillion and other shariah financial institutions with a total asset of Rp12.86 trillion.

In all the shariah non-bank financial industry market has reached 3.93 percent compared to the total assets of general non-bank financial industry.

The shariah capital market has been developed in the framework of accommodating the needs of the people in Indonesia to invest in capital market products in line with the shariah basic principles.

Until March 2015 total shariah shares traded at the shariah capital market reached Rp3,037.46 trillion with corporate bonds reached Rp7.1 trillion and shariah mutual funds Rp11.7 trillion.

(Reporting by Panca Hari Prabowo/Uu.H-YH)

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