All eyes on Indonesia's Islamic finance sector for its high growth potential

Kuala Lumpur

ISLAMIC finance players are keeping a close watch on Indonesia's nascent strides in the sector because of its high growth potential - a large Muslim population but low penetration rate.

Even so, its commitment remains to be seen as often conventional funding could be cheaper. "If Islamic financing is more expensive, will they still do it? What's more important for the government - is it to borrow as cheaply as possible or to support the Islamic finance industry? The two objectives may not always be the same," observed Moody's Investors Service global head of Islamic finance and senior vice-president of GCC financial institutions, Khalid Howladar.