The pioneer of Shariah-compliant finance in the country, the Maldives Islamic Bank has achieved wide backing and incredible growth since its beginnings a decade ago. CEO Harith Harun describes the bank's journey and how it can lend a hand to GCC investors
"From day one, we were overwhelmed with support from the public. The bank has been growing at 30% to 40% a year"
Maldives Islamic Bank was initiated in 2007 and began operations in 2011. What have been the most significant milestones since then?
It's been a very exciting journey over the past seven years or so. We started a bank from scratch – from just a piece of paper, a licence – and built it up step by step, mindful of the fact that it is a totally new banking system. There were no precedents in the market. We even had issues creating the talent – there was nobody here at the time who knew anything about Islamic banking or had experience of it. So it was a challenge but it was something we were aware of. The bank was set up by the Islamic Development Bank (IDB) through its private sector arm, the Islamic Corporation for the Development of the Private Sector (ICD), with the Maldives government as a partner. The Maldives was one of the countries where the effort was made to ensure that Islamic finance would be given the opportunity to grow, bearing in mind that it is a 100% IsIamic country and there is demand for such a service. So there was serious and very strong support from IDB for this project. We are fortunate in the sense that we have two very strong shareholders, the IDB and the government, which is one of the biggest factors that has helped this bank to grow. More importantly, the public here have a very positive perception of this new Islamic financial system. There was already a latent demand for Islamic banking and finance even before we started operation. From day one, we were overwhelmed with support from the public and the bank has been growing at 30% to 40% a year in terms of its asset size and customer base. It's still in the early stage compared with some of the more established conventional banks but we have captured a fair share of the market and it's still growing.
"We are happy to work with GCC investors to explore opportunities and give direction in terms of which sectors have more promising prospects"
How can investors in the GCC use this bank as a tool for their own investments in the Maldives?
We have knowledge of the market. We are happy to work with banks and investors in the GCC to explore opportunities for them to invest in this country – to give them direction in terms of which particular sectors of the market they should put emphasis on and which have more promising prospects. We can act more as their partner if they have plans to invest in the Maldives. At the same time we can cater for the domestic requirements. For example, if part of the investment requires them to obtain funding or source things locally, this is where the bank can come in – to provide support and play a role in helping to partly finance the project from the domestic element of it. This way we can contribute to the entire project.