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Malaysian Takaful Association to introduce sustainability fund under Fund4Cause program

The Malaysian Takaful Association (MTA) will launch a sustainability fund under its Fund4Cause program to support the industry’s aspirations toward combating climate change.

“We found that a lot of sustainability-based engagements have been implemented by member companies and what we aim to achieve is to establish a plan at an industry level through Fund4Cause,” Radzuan Mohamed, CEO of MTA, told ISFI, explaining the motivation behind starting the sustainability fund.

The MTA revealed the fund launch in conjunction with the announcement on the 2022 performance of the Malaysian Takaful industry, which recorded an 18.1% increase in net contributions to RM6.3 billion (US$1.43 billion), representing 23% of the market share.

The Fund4Cause program was launched last year as a mechanism to allow member companies to contribute to causes championed by the MTA, with resources being distributed across four specific funds, namely the VBIT Development Fund, the Social Takaful Fund, the Industry Capacity Building Fund and the Takaful Branding Fund.

Radzuan noted that in the past year sustainability has been a key focus area of the industry globally, which has contributed to the launch of the new fund.

Prior to the launch of the program, the association was financially limited to champion initiatives for the industry as its funding was generated from membership, examination and registration fees.

“The fund has provided MTA with the additional financial capability to implement various initiatives organized for the Takaful industry,” Elmie Aman Najas, the chairman of the MTA, shared.

Through the program, members contribute or invest in MTA initiatives, with the association providing reports on the impact of their investments, Radzuan explained.

According to Radzuan, the MTA received roughly RM1.6 million (US$362,312) in investments last year, with participation from members growing significantly this year. The association has received RM3 million (US$679,335) in commitments year to date.

Indicative of the positive industry response to the initiative is the MTA’s recent ‘Takaful4All’ flood relief initiative which received RM70,000 (US$15,851) in contributions from members, exceeding the program’s asking amount of RM25,000 (US$5,661).

In the past year, the MTA has made several efforts in the sustainability space with the launch of the Value-based Intermediation for Takaful Roadmap 2022 as well as the ongoing development of a Maqasid Shariah Scorecard in collaboration with INCEIF University.

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