{"id":6873,"date":"2017-01-31T15:48:37","date_gmt":"2017-01-31T15:48:37","guid":{"rendered":"http:\/\/english.thesunrisetoday.com\/?p=6873"},"modified":"2017-01-31T15:48:37","modified_gmt":"2017-01-31T15:48:37","slug":"islamic-finance-sees-big-growth-in-europe","status":"publish","type":"post","link":"https:\/\/english.thesunrisetoday.com\/index.php\/islamic-finance-sees-big-growth-in-europe\/","title":{"rendered":"Islamic finance sees big growth in Europe"},"content":{"rendered":"

\"islamic-finance-info\"Lulwa Shalhoub<\/strong>: In today\u2019s connected world of business, Islamic finance is a concept that people working in the banking and finance industries are likely to come across in their careers.
\nIslamic finance, despite its label, is not limited to Muslim countries. It has shown growth globally, including in Europe.
\nTotal Islamic finance assets worldwide are projected to grow to $3.5 trillion by 2021 from $2 trillion currently, according to Thompson Reuters\u2019 Islamic Finance Development \u201cResilient Growth\u201d report published in 2016.
\nThere are 622 institutions providing Islamic finance courses worldwide, and 201 provide Islamic finance degrees, according to the report.
\nEurope is increasingly showing interest in Islamic finance education. There are 109 institutions that provide Islamic finance education in Europe, 63 percent of them in the UK.
\nBritain issued its first Islamic bond (sukuk) worth \u00a3200 million (over $250 million), according to a statement by the Treasury published on the government\u2019s website in June 2014.
\n\u201cIslamic finance is attractive to ethical investors or those looking to do business with Shariah-compliant businesses,\u201d said Farmida Bi, a London-based banking lawyer and head of Islamic finance in Europe at Norton Rose Fulbright global law firm.
\n\u201cThese economies (in non-Muslim countries) are interested in the financing opportunities that Islamic finance can offer, both as an external investor and to respond to the demands of their indigenous Muslim populations,\u201d she told Arab News.
\nThe case of the UK<\/strong>
\nBeing home to 3 million Muslims, according to the Office of National Statistics in 2016, the UK is a leading hub for the Islamic finance industry in Europe.
\nIt also has a fully Shariah-compliant retail bank: Al-Rayan Bank (formerly Islamic Bank of Britain).
\n\u201cBritain is today the leading center for Islamic finance in the West, including British higher education institutions leading the non-Muslim world in the teaching of Islamic finance,\u201d said Nyra Mahmood, managing director of the UK-based Simply Sharia Human Capital (SSHC Ltd.).
\nShe emphasized the important role financial technology (FinTech) can play in further introducing Islamic finance and banking.
\n\u201cThe opportunities emanating from the FinTech scene and the ethical financial space gives rise to how the UK\u2019s Islamic finance can look at shaping and taking the lead in fulfilling the wider needs of society through technology and innovation, especially with a younger, more socially active generation wanting to join the industry,\u201d she told Arab News.
\nShe said the younger generation expects more from their money, as they are socially conscious and want to see companies embrace their corporate social responsibility along with being part of a financial services sector.
\n\u201cThese are the issues driving a new generation of Islamic finance practitioners and consumers alike, both Muslim and non-Muslim in Europe and beyond.\u201d
\nMahmood said factors that can affect Islamic finance moving forward in the UK, directly and indirectly, include the aftermath of the Brexit vote, the UK\u2019s economic outlook for 2017 onward, and customers\u2019 needs.
\n\u201cWith this in mind, the UK\u2019s Islamic finance industry is well positioned.
\n\u201cAs the country looks beyond the EU, there\u2019s an opportunity to align the UK with investors and partners from other Islamic hubs, namely the Gulf and Malaysia, which is already happening,\u201d she said.
\n\u201cFurther engagement and investments with these regions and others, through support from the UK government, can strengthen Islamic finance in the UK and assist Britain economically.\u201d
\nIslamic finance has witnessed a rise in the past 10 years. Europe\u2019s tallest building, the 95-story Shard skyscraper marking London\u2019s landscape, was financed through Shariah-compliant instruments.
\nOther projects such as Chelsea Barracks and the Olympic Village were also partly or wholly financed in the same manner, said Mahmood.
\nThere is growing demand among non-Muslims for more education and awareness of the industry as well as products.
\nIn a survey by Al-Rayan Bank in 2014, 57 percent of non-Muslim participants said Islamic finance was relevant to all faiths because they believed it was ethical.
\n\u201cMany professionals working in Islamic finance today have a background in conventional finance and banking, and many of those are non-Muslim,\u201d Mahmood said.
\n\u201cAs a firm, most of our clients in terms of training in Islamic finance are from the conventional professional services, law firms, accountancy practices and non-Shariah-compliant banking and finance staff.\u201d
\nMuslims and non-Muslims \u201care looking for an alternative that promises and delivers on ethical values.
\nThe underlying principles of Islamic finance promote equity, fairness and the betterment of the wider community.\u201d
\nThe case of Spain<\/strong>
\nSpain is one of the countries curious about Islamic finance. One of its top business schools, IE Business School based in Madrid, has a center that teaches and researches Islamic finance.
\n\u201cThere\u2019s a lack of knowledge in Islamic finance. Everybody is looking but no one is pushing yet,\u201d Gonzalo Rodr\u00edguez, general coordinator at the Saudi-Spanish Center for Islamic Economics and Finance (SCIEF), told Arab News during a visit in Jeddah.
\n\u201cAfter the financial crisis (in 2008), ethical banking became much more popular, especially among young people. We believe it\u2019s fair, ethical and based on real economy, and we try to spread this approach.\u201d
\nSCIEF is the fruit of collaboration between the Islamic Economics Institute at King Abdulaziz University (KAU) in Jeddah and IE Business School, and has been running since 2009.
\nAlthough Islamic finance and banking remains non-existent in Spain, it is becoming popular among finance students who wish to gain international experience. The role it plays is both educational and advisory.
\n\u201cWe\u2019re trying to spread knowledge of Islamic finance in Spain, and to reach out to all players to explain to them what Islamic finance is, its potential in Spain, and the opportunities we have for Islamic finance in the country,\u201d Rodr\u00edguez said.
\n\u201cWe see Islamic finance as an industry and an alternative way to make finance. It opens windows for foreign investments.\u201d
\nHe pointed out what he believes are the three main reasons behind growing interest in Islamic finance in Spain. First, it is seen as a new industry that is booming.
\n\u201cSecond, when people study Islamic finance they find it more ethical and believe in its principles.\u201d
\nThe third reason is that the person is Muslim and wants to adhere to his or her religious teachings.
\n\u201cAs an international business school, we think worldwide. Islamic finance makes 1 percent of assets worldwide. We have students interested in that. They\u2019ll probably not work in Spain, but in other countries,\u201d Rodr\u00edguez said.
\nHe and a number of his colleagues from SCIEF came to Jeddah last week to give the third edition of the center\u2019s annual four-day Islamic Finance Executive Program (Jan. 23-26), in partnership with the Islamic Research and Training Institute (IRTI) and KAU.
\nThe program consisted of classroom sessions, roundtable discussions and field visits. Students were mainly international.
\nThe university played a role in teaching and organizing, as the teachers were both from the university and the center.
\n\u201cStudents studying finance at IE Business School can choose the Islamic finance module as an elective, and they\u2019re not necessarily Muslims,\u201d Rodr\u00edguez said.
\nThe collaboration between Jeddah and Madrid goes both ways. Every year, SCIEF hosts 10-15 students from KAU coming to the IE Business School \u201cimmersion week\u201d on entrepreneurship, not Islamic finance, but they take advantage of Saudi Arabia having a center in Madrid at a top university.
\nBeing a country with a small Muslim minority \u2014 4 percent of the population as of 2015 \u2014 having a religious label can be a barrier, Rodr\u00edguez said. Applying it will require changes in the way the banking system works.
\n\u201cAt a regulatory level, it\u2019s quite difficult to accept Islamic finance and give a license to a bank, because then we\u2019ll need to change many things in our laws and banking regulations in terms of interest for example,\u201d he said.
\n\u201cIt\u2019s difficult to put it in the agenda because it\u2019s difficult to explain it in Spain. I think there are challenges and opportunities for Islamic finance in terms of lands, investments in real estate, in the halal industry that is growing.\u201d
\nThe center created a think tank in 2016 with \u201cmain players of the economy in Spain from banks and law firms,\u201d including Santander Bank.
\n\u201cWe\u2019ll have four meetings per year,\u201d Rodr\u00edguez said. \u201cThey see the opportunity, and if something happens they want to be there. They know Islamic finance represents 1 percent of assets worldwide.\u201d The first meeting is set to take place on Feb. 23.
\nRodr\u00edguez said Spain is yet to start adopting Islamic finance and banking due to the small number of Muslims in the country and the lack of knowledge about it.
\nHowever, he said FinTech can accelerate its introduction: \u201cBanking is changing, and will absolutely change in the next five years. FinTech is the future. Relations between the bank and client will change.\u201d<\/p>\n

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