What

ROLE OF ISLAMIC VENTURE CAPITAL

There are a lot of Islamic Venture Capital (IVC) role that we can list down. Some of its roles is it would provide a key example of how Islamic finance can do more than just replicate conventional products, because the risk- and return-sharing structure of venture capital fits hand-in-glove with the underlying principles of Islamic finance. Investment are made in businesses that offer Shariah compliant product and services and because the investment model is based on long term active partnership and risk sharing consistent with the Shariah principles of mudharabah, musyarakah and wakalah.

It is also to integrate the profitability and developmental perspectives in accordance with the goal on Islamic law (maqasid as-Shariah), resource allocation in such a system follows the rule of developing complementarily across diverse possibilities. As we know the Islamic Venture Capital is also a vital element in the Islamic value chain of corporate finance that will serve to increase the breadth and variety of Malaysia’s Islamic capital market offerings.

Islamic venture capital is an area where Malaysia can easily distinguish itself from other venture capital markets in the emerging economies.

The developments of Islamic venture capital wills offer the opportunity for Islamic investors to diversify their portfolios. Also, the fact that venture capital does not have perfect correlation with other asset classes such as listed securities allows more opportunity for investors to enhance their portfolio returns. The development of Islamic venture capital will serve as a valuable asset class for the Islamic finance industry.

The Islamic Venture Capital industry require the fusing of talents well versed with Shariah as well as finance knowledge and a third additional elements a deep working knowledge of industry and markets as well to promote the adoption of appropriate standards for the development of the emerging Islamic venture capital...