After a long break from the blog, it's ironic that it takes a long week to interest me, to write something useful or at least of some decent worth.
After attending a 5-day workshop-like session on Islamic finance, one is mentally drained not simply because of the activity itself, but the mental questions that one asks oneself of Islamic finance: "Who is Islamic finance for?"
After attending a 5-day workshop-like session on Islamic finance, one is mentally drained not simply because of the activity itself, but the mental questions that one asks oneself of Islamic finance: "Who is Islamic finance for?"
This question has two prongs.
Firstly, for non-Muslims who are familiar with Islam, they know that Islamic finance or banking is not for Muslims only. The ideal view in Islamic finance is for a fair, socio-economic or financial system that works for everyone, irrespective of whether one is rich or poor, young or old, Middle-eastern, Asian or Western, or whether one is a Muslim or not.
Yet, such is the view towards Muslims notably in communities that know little about Islam, that anything labeled with 'Islam' is viewed suspiciously. At the same time, religion in itself is a tricky thing. If someone asks me to consider 'Christianity banking' or 'Jewish banking', I'd perhaps too be cautious, without knowing what it is all about. Therefore, I'd feel that Islamic banks should drop the name 'Islamic' in their names. What is a name. A name is only as a good as what it represents. If Islamic banks are truly ethical in that it avoids interest (riba), advocates reduction in poverty & a fair financial/banking system, then it should not worry about not having the word 'Islamic' in its name. What's in a name?
Yet, such is the view towards Muslims notably in communities that know little about Islam, that anything labeled with 'Islam' is viewed suspiciously. At the same time, religion in itself is a tricky thing. If someone asks me to consider 'Christianity banking' or 'Jewish banking', I'd perhaps too be cautious, without knowing what it is all about. Therefore, I'd feel that Islamic banks should drop the name 'Islamic' in their names. What is a name. A name is only as a good as what it represents. If Islamic banks are truly ethical in that it avoids interest (riba), advocates reduction in poverty & a fair financial/banking system, then it should not worry about not having the word 'Islamic' in its name. What's in a name?
The second prong is the direction that Islamic finance is heading. To some extent, I disagree with some aspects or those who advocate within Islamic banking, such as those whom aggressively advocate for derivative products or banking products that appears to create financial wealth instead of real economic productivity. In my opinion, the implication of trying to push for those financial products (rather than those leading to real economic productivity) , whilst mimicking conventional financial products along the way, is more likely to enrich the rich, rather than alleviate poverty amongst the poor via microfinance capital, ventures, takaful etc. In addition, Islamic banks that continue to aggressively advertise so-called Islamic credit cards or other debt products is more likely to create a consumer and credit culture, rather than a savings and investment culture. Who then is Islamic finance for? The rich? Or does it really include the poor?
Despite my critical opinion above, one can appreciate that Islamic finance is only 35 years old or so, compared to centuries of interest-laden financial banking. Yet the challenge is to avoid going down a path which absolutely mimics conventional finance. Planting the seeds of conventional finance, within the realm of Islamic finance is dangerous. In years or decades to come, the financial products or structures may become deep-rooted, making it more difficult to change from a Shariah-compliant system, to a Shariah-based system.
Despite the challenges, I do feel these challenges are worth the mental strain and physical effort. Nothing worth having ever came easy. An ethical financial system that provides financial structures & opportunity for the rich and the poor, irrespective of religious background, ethnicity and race is worth the effort.
"So, verily, with every difficulty, there is relief: Verily with every difficulty there is relief."
- The Qur'an (94: 5-6)
My thoughts.
