At the same time, disruptions and displacements due to the long-term threats of climate change events continue to persist. Collectively, these present serious ramifications to macro and socio-economic development. Implicit from this crisis is the valuable lesson which compels us to rethink on how we can and should navigate more inclusive and sustainable development, and the role of finance. This presents a prime opportunity for Islamic finance to deliver greater values and impact. With principles of maqasid Shariah that are universally aligned with the vision of sustainable, balanced, and inclusive economic growth, Islamic finance can meaningfully contribute towards delivering maslahah (benefits) at large and preventing mafsadah (intensified harm) to the economy and livelihood of the people. Indeed, Islamic finance and Islamic financial institutions can provide clear leadership on this front. As the global economy heads towards recovery, a challenge upon us is to address the heavy impact from the crisis. With the commencement of rebuilding efforts, it is crucial for us to embrace reform towards more responsible and meaningful financial intermediation activities. It is therefore our collective responsibility to be laser-focused in combatting the impact to prevent permanent scarring to the economy and social resilience. To materialise this, at least three (3) attributes come to mind on how Islamic finance can play a catalytic role as the impetus towards sustainable and inclusive economic recovery. First, Islamic finance is primed to offer value-based solutions. This is given the inherent value of maqasid Shariah that strives for attainment of benefit and prevention of harm.

This brings me to my second point, for Islamic financial institutions to leverage the versatility and diversity of Shariah contracts, to consistently innovate and keep pace with the rapidly evolving economic landscape and demographic changes. In Malaysia, the universal scope of business under the Islamic Financial Services Act (IFSA) 2013 allows Islamic financial institutions to mobilise a wide range of solutions both on the asset and liability sides, towards delivering meaningful impact, beyond the traditional norms. For example, the adoption of mudarabah contract in Investment Account provides risk absorbent funding avenue for high-risk businesses to raise capital. The gaining traction of Investment Account helps to diversify the funding structure of Islamic banks, which is now close to 12% of total funding as at June 2021. Large potential to spur innovation therefore lies beyond the traditional adoption of Shariah contracts. The entrenched versatile feature within Shariah itself offers the latitude for innovation and creativity. This includes smart contracts, without compromising the fundamentals of Shariah. Optimising technological advancement brings wealth of benefits to efficiency and transparency, as well as manages risk effectively. This is particularly vital considering multiple applications of Shariah contracts in Islamic products and services that demand higher degree of transparency and disclosure, alongside ensuring information symmetry to customers and strengthening confidence to Islamic finance. Ultimately, we can become more inclusive by leveraging digital infrastructure through greater outreach to the underserved segment of the society.