Indonesian Ministry and Bank Syariah Pledge to Create Global Halal Hub

Indonesia’s Ministry of State-Owned Enterprises and state-run Bank Syariah Indonesia (BSI) are steadfast in their mission to elevate Indonesia as a central figure in the global halal value chain. Boasting the world’s second-largest Muslim population, Indonesia holds significant strategic advantages, positioning itself to become a global halal hub.

During the inauguration of the BSI International Expo 2024 in Jakarta, Kartika Wirjoatmodjo, the ministry’s deputy minister, highlighted this ambitious vision. “Indonesia, with its extensive Muslim demographic, is well-placed to become the nucleus of the global halal industry,” Wirjoatmodjo asserted. This commitment underscores Indonesia’s potential to drive substantial growth and innovation within the halal market, enhancing its global economic influence.

BSI’s Transformation

Consolidating three state-owned syariah banks into BSI in 2021 marked a significant milestone in Indonesia’s financial landscape. This merger was a key step in the ministry’s broader transformation strategy. In just three years, BSI has demonstrated remarkable progress, securing a place among the Top 10 Global Islamic Banks by market capitalization.

As of March 2023, BSI’s market capitalization surged to Rp131.47 trillion (approximately US$7.9 billion), propelled by a notable rise in its share price. Financially, BSI stands out as the only syariah bank in Indonesia’s top five banks, boasting total assets of Rp353.4 trillion and a net profit of Rp5.7 trillion in 2023. Additionally, BSI emerged as Indonesia’s largest zakat contributor, donating Rp222 billion last year.

Expanding Global Footprint To Become Global Halal Hub

BSI’s ambition extends beyond national borders. The bank recently inaugurated an operational branch in Dubai, UAE, and is in the process of establishing a branch in Saudi Arabia. These strategic expansions aim to enhance the Islamic financial ecosystem, particularly for Hajj and Umrah services.

“BSI is committed to being an inclusive and modern syariah bank, catering to all customer segments,” Wirjoatmodjo affirmed. The bank’s customer base has grown significantly, now serving over 20 million customers—a remarkable increase of more than 6 million since the merger. This growth positions BSI as the fifth-largest bank in Indonesia by customer count and the syariah bank with the most extensive customer base globally.

BSI International Expo: A Catalyst for Halal Industry Growth

The BSI International Expo 2024 epitomizes BSI’s dedication to fostering the Islamic ecosystem and the halal industry in Indonesia. This annual event aims to connect halal business entrepreneurs with international buyers through business matching sessions. Wirjoatmodjo expressed optimism that these engagements would enable BSI-assisted small and medium enterprises (SMEs) to expand globally and benchmark their halal products against those in other Muslim-majority countries.

The Road Ahead

Indonesia’s journey towards becoming a Global Halal Hub is underpinned by strategic initiatives and robust financial performance. BSI’s role is crucial in this endeavor, providing financial services that support the growth of the halal industry. With its expanding international presence and increasing customer base, BSI is well-positioned to drive Indonesia’s ambitions on the global stage.

By capitalizing on its strategic advantages and committed leadership, Indonesia is set to make significant strides in the global halal market, enhancing its economic growth and securing its place as a leading player in the global halal ecosystem.

Indonesia’s commitment to becoming a Global Halal Hub is clear. Through strategic initiatives, robust financial institutions like BSI, and international expansion, the country is paving the way for significant growth in the halal industry. The BSI International Expo serves as a testament to this commitment, fostering global connections and supporting local businesses in their quest to make a mark in the global halal market.