The Annual Islamic Finance Conference (AIFC) is a Ministry of Finance annual event that brings together policy makers, economists, academics, and private sector to discuss various key Islamic finance, economic and development issues particularly for Indonesia. The purpose of AIFC is to discuss and exchange new ideas and information among experts and relevant stakeholders. Previously, AIFC was held in Jakarta in 2016, Yogyakarta in 2017, and Makassar in 2018.
This year, AIFC would raise an interesting topic that has already became a global interest: impact investing. The topic is also in line with the Government's concern to determine the impact of investment incurred on social, finance, and environment.
This conference is also held in conjuction with a call for paper event that is aimed to gather high quality papers, which are expected to become references for academia and policy makers, particularly in the field of economy and Islamic finance.
Impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Impact investing can provide capital to address the world’s most pressing challenges in sectors that become the focus of Sustainable Development Goals (SDGs), such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education.
Islamic finance is very well-positioned as a framework for impact investing due to its underlying ethical principles and moral considerations. Islamic finance and impact investing can even be complementary in some areas - both occupy leading positions in the value-based investment universe, possess rigorous moral and social criteria, and share a broader understanding of the relationship between capital and society at large. In reality, however, the contribution of Islamic finance in impact investing is still very limited, including in Indonesia.
Nevertheless, Indonesia has recognized the importance of Islamic impact investing, among others, by incorporating impact investing as one of the main programs in the Masterplan for Indonesian Islamic Financial Architecture, formulated by the National Development Planning Ministry (Bappenas).
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