Islamic Finance and SDGs: Connecting Dots

Abstract

After the expiry of Millennium development goals (MDGs) in 2015 United Nation adopted Sustainable development goals in 2015. With an estimated investment of $93 billion required for achieving the SDGs 2015–2030 into infrastructure, health, energy, and environmental projects, Islamic finance is considered a strong source of funds because of the same underlying objectives that is to promote profit and loss sharing concepts with halal avenues that add value to the society at large. The legal, regulatory, social, and technological landscape of the countries adopting Islamic Finance in order to achieve SDGs have to be conducive and proactive. With the technological advancements the cost of raising capital can be reduced and abiding by Shariah laws will ensure the positive contribution to society. Many Muslim countries are quite behind in terms of progress for achieving SDGs, due to lack of investment. Whereas Islamic finance is the most sought-after way of financing for Muslims and having double-digit growth all across the world can help Muslim-majority countries to speed up the process of achieving SDGs by using it proactively. Malaysia and Indonesia are the only two countries that launched Green Sukuk and Malaysia is considered as a leader not only for Islamic Finance but also for progression toward achieving SDGs. This paper focuses on the similarities between Islamic Finance and SDGs and how Islamic finance can help to achieve 17 SDGs in a fecund manner. The paper provide products devised on the basis Musharkah, Mudaraba, Salam, and Istisna in order to achieve these goals.