SYDNEY / KUALA LAMPUR: Islamic pensions are making inroads in several majority-Muslim countries, and their success may help the growth of asset management industries across much of Asia and the Middle East.
Most pension plans around the world are state-funded. But many countries are trying to develop private pension sectors as a way to deepen their financial markets, and the experience of Pakistan, Turkey and Malaysia suggests Islamic finance can become a significant part of this effort.
If state-owned pensions in major Islamic markets shift a portion of their money into Shariah-compliant schemes, that could add between $160 billion and $190 billion to the sector, according to consultants Ernst & Young.
“So you’ve got a pent-up demand – your challenge is how to create a supply-side mechanism to cater to that latent demand,” said Ashar Nazim, Islamic financial services leader at E&Y
Couresty: Express Tribune Pakistan