Bank Muamalat Aims For Green Financing Growth Of Up To 50 Percent

Bank Muamalat (Between)

PT Bank Muamalat Indonesia Tbk boosted the distribution of green financing by targeting growth of 50 percent year on year (yoy) this year.

Bank Muamalat President Director Indra Falatehan said that at the end of December 2023, the distribution of financing in the Environmental, Social, and Governance or ESG segments was recorded at around Rp. 1.3 trillion. The majority of the distribution of financing is carried out in the environmentally friendly transportation sector, the management of biological natural resources and the sustainable use of land.

"This year we project that the distribution of ESG financing will grow by 50 percent with a focus on the management sector of biological natural resources and sustainable land use," he said in a statement received by VOI, Tuesday, May 14.

Indra explained that the concept of green financing based on sustainable development goals or Sustainable Development Goals is in line with the principles of sharia maqashid applied by Islamic banks, including Bank Muamalat. Maqashid sharia itself is a concept in Islam that refers to the goals and principles that underlie Islamic law.

In the context of Islamic banking, he continued, maqashid sharia plays a role in determining the main goals of banking practices that not only benefit individuals but also society as a whole. Where it also includes sustainability to the environment and social.

In line with this, Bank Muamalat made the triple bottom line a sustainable business concept by measuring the value of success in realizing business through the impact on three indicators, namely, People (Social), Planet (Curities), and Profit (Economics).

Bank Muamalat guarantees its business continuity by not only paying attention to the interests of getting profit but also paying attention to benefits for the community, running a business that is in line with environmental maintenance programs, and having an impact on the economy, especially the sharia economy.

Bank Muamalat has set a number of initiatives that have been and will be implemented in the next few years to support the green financing program. Among them are financing to electricity-based transportation equipment manufacturers and the clean/renewable energy sector such as Micro Hydro Power Plants (PLTMH), Solar Power Plants (PLTS), and Hydroelectric Power Plants (PLTA).

In addition, Bank Muamalat will also channel financing to the fisheries sector, such as to marine fishery production and repair service companies as well as to the forestry sector.

One form of implementation of green financing at Bank Muamalat is the program to finance electric vehicle ownership for employees.

"In this program, Bank Muamalat provides special incentives and ease of process for employees who want to have electric-based vehicles," concluded Indra.