Quoted from Professor El Gamal Available at http://elgamal.blogspot.com/
Rebooting Islamic Finance: It’s Time
I have been very critical of Islamic finance as it has evolved since the 1970s: an inefficient part of the international financial system that served no purpose except line the pockets of lawyers and experts. Now that the tools of structured finance have been proven to be as much a disaster as others and I had warned, perhaps participants in this industry – many of whom are sincere, I am sure – will hopefully abandon their response to my critiques: “what is wrong with SPVs, that is how all finance is done with success.”
Perhaps now is the time to switch from negative criticism to positive suggestions of how to do things differently. This is not an area where I believe in keeping ideas to oneself until one publishes them or makes some money in consulting fees for proprietary structures. Also, it is an area where open discourse may help to improve upon proposals. So, here we go, starting with possible innovations in microfinance structures that I hope to start investigating experimentally this summer.
Notes: This is what Islamic finance waiting for. Criticism is much welcome but constructive criticism with positive suggestions are much more needed in the industry. I believe that Islamic finance industry is now in the new phase of its development towards a new direction. If the Prophet SAW migrated (hijrah) to Medina for the sake of Allah, Islamic finance shall also do the same. Hijrah from concentrating on Shari’ah-compliant instruments towards Shari’ah-based products. Hijrah from maximising Shareholder-value towards stakeholder-value with maqasid Shari’ah and social justice as the paramount consideration. It is time for Hijrah. Hijrah!!!!!!
Osaka Castle (Built in 1583 by Toyotomi Hideyoshi), Osaka, Japan.