📈 IFFSA 2026: Islamic Finance Sector Urged to Focus on Purpose over Growth

The 11th Islamic Finance Forum of South Asia (IFFSA) 2026, held in Colombo, called on the regional Islamic finance sector to prioritize ethical impact, real economic activity, and financial inclusion over balance sheet expansion. • Sector Evolution & Milestones: • Sri Lanka's Islamic banking journey began with investment services (1997) and Takaful insurance (1998). • Banking Act amendments recognized Islamic finance in 2005. • Amana Bank received the nation's first fully-fledged Islamic commercial banking license in 2011. • Key Regional & Industry Insights: • Global Islamic finance assets have reached an estimated US$ 4.4 Trillion, yet experts questioned if this scale translates into true community impact. • Industry leaders emphasized supporting lower-income households, small traders, microfinance, and venture capital for young entrepreneurs. • Sri Lankan financial services providers face hurdles due to incomplete legal, regulatory, and Shariah governance frameworks across all non-bank providers, alongside a lack of uniform public disclosure data. • Strategic Focus Areas: • Sector pioneers outlined five core strategies: strategic patience, systemic infrastructure over individual branding, public awareness, treating ethics as an investment, and cross-border knowledge sharing (e.g., with Malaysia). • Priority urged for developing multi-skilled talent in financial analysis and Shariah principles to broaden equitable access to capital across South Asia.