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ANNUAL REPORT 2024 1 2 3 4 5 Sustainability Statement 6 7 8 97

• The Bank observed a notable increase in financing penetration across semi-urban and rural areas, with a significant
portion of Ar Rahnu and SME financing directed to communities historically excluded from mainstream financial services.
This demonstrates the effectiveness of our outreach efforts and product tailoring in improving financial access at the
grassroots level.
• Feedback gathered from beneficiaries and internal monitoring highlighted that timely access to financing improved
business resilience, allowing many entrepreneurs to sustain operations, preserve employment, and maintain household
income stability. In several cases, financing enabled entrepreneurs to transition from informal to formal operations, laying
the groundwork for long-term business scalability.

• The Bank’s efforts also contributed to strengthening the entrepreneurial ecosystem by reinforcing partnerships with
stakeholders such as vendor networks, cooperatives, and financing guarantee providers. These collaborations not only
enhanced financing capacity but also opened opportunities for further financial advisory, training, and mentorship support
for entrepreneurs.
These outcomes underscore Bank Muamalat’s role in supporting Malaysia’s broader socio-economic agenda by ensuring
that entrepreneurship remains a viable, supported pathway to economic empowerment and financial independence.

M12
RESPONSIBLE FINANCING: ENSURING SUSTAINABLE GROWTH

Why This Matters

Responsible financing is a cornerstone of Bank Muamalat’s In an evolving regulatory and socio-economic landscape,
strategy in fostering long-term value for customers, the the adoption of responsible financing practices
financial system, and the wider community. By integrating enables the Bank to promote inclusive financial access,
ethical, Shariah-compliant, and sustainability principles into uphold stakeholder trust, and mitigate emerging risks.
our financial practices, we aim to support economic growth This approach also aligns with national development goals
while minimising negative impacts on society and the and global calls for financial institutions to play a proactive
environment. role in advancing environmental and social outcomes.

Our Approach
Bank Muamalat adopts a holistic and forward-looking • Policy Implementation and Transparency - We ensure all
approach to responsible financing, grounded in regulatory internal policies are updated and communicated across
alignment, sustainability integration, and customer centricity. the Bank through structured dissemination and training
Our key focus areas include: sessions. Policy changes from regulators are implemented
with transparency and accountability.
• Regulatory Alignment and Gap Assessment - Regular
gap analyses are conducted on all regulatory documents • Climate Risk Management Framework - The Bank
to ensure our internal frameworks remain aligned with developed a Climate Risk Management Framework to
evolving requirements, including Bank Negara Malaysia’s guide climate exposure assessments, risk monitoring,
Policy Document on Responsible Financing, the Climate and business strategy alignment in line with BNM’s
Change and Principle-based Taxonomy (CCPT), Climate CRMSA, CCPT, and CRST frameworks.
Risk Management and Scenario Analysis (CRMSA), and
Climate Risk Stress Testing (CRST). • Shariah-Guided Credit Practices - Financing assessments
are aligned with Shariah principles that emphasise
• ESG and Climate Risk Integration - ESG elements and fairness, necessity, and the customer’s long-term financial
climate risk indicators are embedded into our ESG well-being. Products are designed to meet essential
Scorecard and credit evaluation process to assess the needs while maintaining customers’ payment ability.
potential impact on our customers’ risk profiles and
align with long-term sustainability goals.