Islamic bank to expand financing for halal MSMEs

MANILA, Philippines — Al-Amanah Islamic Investment Bank of the Philippines is looking to expand financing for businesses in the halal industry, particularly micro, small and medium enterprises (MSMEs) as the government seeks to tap a rising global market.

In a statement, the state-run bank has committed to provide capital to businesses involved in the halal industry that continue to struggle to secure financing because they do not fit the usual requirements of most banks.

The bank is still determining how much it can allocate for financing support as it moves to partner with other government agencies, Al-Amanah Bank chairperson and CEO Amenah Pangandaman said.

“We have the demand to fill, we have our people to do the job, we have a huge market waiting for us but without the capital— the financing — it will always be an arduous task to get out of that niche market concept attached to halal,” she said at the Philippine Halal Industry Summit.

Pangandaman said financing for the MSMEs must support the whole value chain, from production to certification, logistics, scaling up and eventually exporting.

She also noted that halal certification is a pertinent issue that needs to be addressed within the industry.

“Unfortunately, many MSMEs are having a hard time financing the costs needed to enter the halal market, such as certification and facilities and production upgrades, among others,” she said.

With this, Al-Amanah is working with the Department of Trade and Industry for the provision of financing support for halal expansion, including accreditation fees and halal slaughterhouse facilities via a memorandum of understanding (MOU).

It is also partnering with the Cooperative Development Authority to support the expansion of cooperatives engaged in the halal industry.

The bank and the National Commission on Muslim Filipinos agreed to pursue a MOU for the provision of Islamic financing support for MSMEs and halal certifying bodies.

“We should not miss the boat. There is so much room for growth — growth to show that halal is more than just a dietary restriction in observance of our faith. But it is an opportunity to push forward economic development alongside inclusivity,” Pangandaman said.

The global halal industry is estimated at $4 trillion and projected to reach $10 trillion by 2030, driven by a rising Muslim population and ethical consumerism.

Non-Muslim consumers are opting for halal products given strict adherence to high-quality and health standards.

Under the Philippine Halal Industry Development Strategic Plan, the government aims to attract P230 billion in investments by 2028, double the number of halal-certified products and services to 6,000 and generate 120,000 jobs.

The country, however, continues to rely on imports amid a supply gap, with more than $100 million worth of halal products brought into the Philippines in previous years.

Pangandaman, who resigned as budget secretary following allegations of budget insertions, returned to government service after being appointed to head Al-Amanah Bank in July.