Pakistan has significant potential to expand its role in the global Islamic economy by developing new Shariah-compliant financial products, strengthening regulatory frameworks and building specialised expertise across the sector, according to Yousef Hassan Khalawi, Secretary General of the Islamic Chamber of Commerce and Development (ICCD). Speaking at the Securities and Exchange Commission of Pakistan (SECP) Talk Series on Islamic finance, Khalawi said the country has several structural advantages that could help it capture a larger share of the rapidly developing global halal economy.
Khalawi highlighted Pakistan’s large Muslim population, sizeable overseas community, growing Islamic finance industry and established pool of financial professionals as important strengths for developing the sector. He said these advantages provide Pakistan with a foundation from which it can expand beyond conventional approaches to Islamic finance and create products that are relevant not only for domestic consumers and businesses but also for international markets. According to him, the country has an opportunity to use its existing financial expertise and market size to develop specialised offerings that can compete within the wider global Islamic economy.
The ICCD Secretary General said Pakistan now needs to move beyond traditional Islamic financial products and focus on developing new solutions capable of addressing changing market requirements. Fintech was identified as one of the areas where Pakistan could develop new Shariah-compliant offerings and broaden access to Islamic financial services. The integration of financial technology with Islamic finance could allow institutions to reach customers more efficiently while creating products designed for both local and international markets.
Khalawi also stressed that the role of Islamic finance should extend beyond financial transactions and contribute to wider economic and social development. He pointed to the potential of Waqf-based investment structures as one area where Islamic finance could have a broader impact. Professionally managed and transparent listed Waqf models, he said, could allow contributions from individuals, including relatively small amounts, to be pooled and directed towards projects in areas such as education, healthcare and infrastructure.
Such structures could provide an additional mechanism for mobilising private contributions towards development projects while maintaining a Shariah-compliant framework. Khalawi’s comments highlight the potential for Islamic financial structures to connect individual savings with projects that have broader social and economic objectives. The development of professionally managed Waqf models could also help create more structured investment opportunities while improving transparency and accountability within the sector.
Agriculture was another area identified by Khalawi as having substantial potential for Islamic finance. Pakistan’s agriculture sector requires significant funding, and the development of specialised Shariah-compliant financing instruments could help address some of the financing requirements of farmers and agriculture-related businesses. Khalawi called for greater expertise in this area so that financial institutions can design products suited to the specific characteristics and funding needs of the agricultural sector.
The discussion also examined Qard Hassan, an interest-free lending structure that could provide financing to individuals and businesses without the conventional interest-based cost. Fintech was identified as a potential means of making Qard Hassan more accessible and reducing the cost of delivering such financing. Digital platforms and financial technology solutions could potentially simplify the process of connecting borrowers with available interest-free funding while improving the efficiency of administration and distribution.
Khalawi further emphasised the importance of developing common Shariah standards for the Islamic finance industry. Greater consistency in standards can help provide clarity to financial institutions, investors and customers while supporting the development of products that can operate across different markets. Alongside common standards, he stressed the need for stronger professional training and specialised expertise to support the continued development of the sector.
The emphasis on professional capacity is particularly relevant as Islamic finance expands into fintech, agriculture, investment structures and other specialised areas. Developing new products requires professionals who understand both financial technology and Shariah principles, as well as the regulatory and commercial requirements associated with different markets. Stronger training could therefore support financial institutions in creating products that meet both compliance requirements and customer needs.
The discussion at the SECP Talk Series reflects the broader opportunities available to Pakistan as the global Islamic economy continues to develop. The country’s demographic base, overseas community, existing Islamic finance industry and financial sector expertise provide a foundation for further expansion, while fintech, Waqf investment, agriculture financing and Qard Hassan represent potential areas for new product development.
Pakistan’s ability to increase its participation in the global halal economy will depend on how effectively these advantages are combined with appropriate regulations, common Shariah standards, professional expertise and technology. According to Khalawi, moving towards a wider range of Shariah-compliant financial solutions could allow Pakistan to serve domestic needs while also developing products with potential relevance in international markets.
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