MDEC to launch Islamic digital framework

KUALA LUMPUR: Malaysian Digital Economy Corp (MDEC), which is looking to launch the Islamic digital economy framework by March 2018, is hoping that the framework will play a role in the development of syariah-compliant venture capitals in Malaysia.
Speaking at a media briefing today, MDEC vice-president of growth ecosystem development Norhizam Kadir said the framework will also serve as a guideline for venture capitals to conduct their transactions and investment in compliance with syariah laws.
MDEC is working with Jabatan Kemajuan Islam Malaysia (Jakim) and Amanie Advisors Sdn Bhd to formulate the framework, for which works are currently in progress.
The trio entered into a tripartite agreement to develop the framework during the World Islamic Economic Forum 2017 held in Kuching last month.
Amanie Advisors founder and group chairman Datuk Dr Mohd Daud Bakar said if there is a need, the group might consider putting in a new proposal to make Islamic venture capitals a working solution.
“It has not been done before…it was scattered and we need to put it into a concrete infrastructure for the benefit of those start-ups as well as the for the funders,” he said.
Meanwhile, Norhizam said three venture capital firms have shown their interest and commitment to function in line with the provisions of the framework.
“The framework will definitely help them… they need this framework as well to ensure that as they are raising their funds, these funds are coming from the right syariah-compliant sources and how they are transacting and investing will have to be in accordance to compliance,” he added.
On top of that, MDEC is also engaging with domestic investors such as government-linked companies and fund managers in relation to investing in venture capitals.
Besides funding and financing guidelines, the framework entails provision on halal and syariah compliance, Islamic digital economy regulations and halal business operation.
The group will also be engaging with stakeholders from Bank Negara Malaysia, the Securities Commissions and government agencies with regards to the framework.
As the global Islamic economy is expected to grow to US$3 trillion (RM12.2 trillion) by 2021, the framework will also assist start-ups venturing into segments related to Islamic digital economy. This would also help the expansion into the global marketplace while concurrently providing a competitive advantage for the country to lead the regional and global Islamic digital marketplace.
MDEC is of the view that the framework will be instrumental in increasing the contributions of the digital economy segment to the gross domestic product to 20% by 2020 compared with the current contribution of 18.2. However, the composition of the contribution from the Islamic digital economy segment is not known.