In the coming years, as the Shariah principles of using capital to build productive capacity gain wider recognition, Islamic Finance will assume a more prominent role. Estimates of global Islamic Finance assets today range from $ billion to $ 1 trillion and one consultancy firm estimates this could potentially grow to $ trillion by 2012. 4 Countries in Asia are using Islamic Finance to fund urban development and public infrastructure projects to meet the growing demands of their populations. The ADB estimates that Asian countries would need more than $ trillion of infrastructure investment between  3  Kawai and Wignaraja, “The Asian "Noodle Bowl": Is It Serious for Business?” Asian Development Bank Institute Working Paper Series No. 136, April 2009. 4  Oliver Wyman, “The Next Chapter in Islamic Finance - Higher Rewards but Higher Risks”, April 2009. 2  BIS Review 57/2009  2010 and 2020. 5 International financial institutions such as the Islamic Development Bank are active in funding worthwhile investment projects. The global sukuk market remains a relatively new asset class with much room to grow out. In 2007, Asian currency-denominated sukuk outstanding grew by almost 50% but the market contracted by only 1.5% to $ billion at end-2008. 6 Around $ billion in sovereign sukuk issuance will come from Malaysia, Indonesia and Singapore in the first half of 2009, and more private sector issuers are expected to tap the sukuk market and to attract new investors and clients.

Greater scope to enhance inclusivity and quality of e-payment adoption The first priority is to improve the quality of our e-payment migration to be more inclusive, broadbased and sustainable. The good progress so far means that Malaysia has a solid foundation for more widespread adoption of e-payments. E-payments are increasingly prevalent, with adoption picking up across a wide range of use cases. A wider network of merchants is also increasingly open to accepting e-payments as a possible driver of efficiency gains and revenue growth. Importantly, these encouraging developments have been contributed, in part, by the market reforms and incentive structures implemented since 2013. These measures have corrected market distortions and facilitated the pooling of industry resources to continuously enhance the payment infrastructure and services. Nonetheless, there are opportunities for more inclusive and broad-based adoption. Studies have shown that cash usage is still prevalent with more than 80% of Malaysians reportedly using cash in a majority of their everyday spend such as F&B, groceries and fuel. E-payment adoption is also uneven across geolocation and is largely concentrated in the urban centres. This calls for greater efforts in two key areas to address such market gaps. The first key area is to significantly expand merchant acceptance, with a focus on lower-tier merchants. E-payment acceptance points are not yet ubiquitous, especially among microenterprises that are frequented by many Malaysians, such as wet markets, night markets and hawker stalls. In this regard, solutions that are ‘infrastructure-light’ could go a long way in boosting e-payment acceptance among micro-enterprises who are cost-sensitive.