Does Islamic Finance neglect the women?

Islamic Finance and Women

By Lahem al Nasser Available at: http://aawsat.com/english/news.asp?section=6&id=19516

Riyadh, Asharq Al-Awsat- Islam honors women, enhancing their standing [in society] and granting them their full unabridged rights, and in the process solidifying this view in the hearts of Muslim believers. This can be seen in the fact that one of the surras [chapters] of the Holy Quran is named “al Nissa” [the woman]. Al-Nissa is the fourth surra in the Quran, and one of the seven longest surras in the Quran. There are also a number of Sunnah which relates situations that honor women and their rights.

In one Hadith narrated by Abu Huraira, he said “A person came to the messenger of God and asked ‘Who among the people is most deserving of my fine treatment?’ He said ‘Your mother.’ He then said ‘who next?’ The Prophet replied ‘Your mother’ again. He asked ‘who next?’ The Prophet said ‘Your mother.’ He asked again ‘Then who?’ Thereupon the Prophet said ‘Then your father.’

The prophet’s life was a model of how to honor and do justice to women. In the Sahih al-Bukhari collection of Hadith, the Prophet’s wife Aisha said that the Prophet consulted women and sought their opinion on the most serious issues. The Sahih al-Bukhari quoted al-Miswar Bin Makhrama as saying that “When the writing of the [Hudaybiyyah] treaty was concluded, the messenger of God said to his companions ‘Get up and slaughter your sacrifice and get your heads shaved.’ By Allah, none of them got up, and the Prophet repeated his order thrice. When none of them got up, he left them and went to Umm Salamah and told her of the people’s attitude towards him. Umm Salamah said ‘Oh Messenger of God, do you want your order to be carried out? Go out and don’t say a word to anybody until you have slaughtered your [own] sacrifice and called your barber to shave your head.’ So the Prophet went out and did not talk to any one of them until he did that i.e. slaughter the sacrifice and called the barber to shave his head. Seeing this, the companions of the Prophet got up, slaughtered their own sacrifices, and started shaving each other’s heads, and there was such a rush [to do this] that there was a danger of killing each other.”

Commenting on this Hadith, Imam al-Hassan al-Basri said that the Prophet did not need to consult with Umm Salamah but rather he did this as he wanted to set an example to the people that they should not feel embarrassed about consulting with women.

Despite women’s considerable standing in Islam in general, the Islamic financial industry, which is based upon the principles of Islamic Shariaa law, has failed to give women priority. Therefore women do not occupy their natural position in this industry, even though they contribute financially to this industry’s assets. Experts at the International Islamic Finance Forum held in Dubai 2007 estimated the value that Gulf women contribute to the Islamic financial industry is in the region of $35 billion. Observers may notice this negligence in two major sectors, the employment and business sectors.

As for employment, this negligence is apparent in a variety of aspects, such as qualification and training, as Islamic financial institutions offer few training courses to female employees. Of the few courses that female employees have access to, these are primarily basic courses, not advanced ones. This prevents female employees from being able to qualify for senior positions, and therefore they are restricted to lower-level management and marketing positions. This has created a shortage of qualified female employees in the Islamic financial sector, which in turn has caused a lack of qualified trainers for female employees of Islamic financial institutes, thereby creating something of a vicious circle. There is also a lack of a suitable work environment in line with the provisions of Islamic Shariaa law, and this is something that would increase productivity. This lack of a suitable work environment places pressure on the female employees in the financial sector, causing professional employees to abandon their work as a result of this. This also prevents the Islamic financial sector from easing unemployment rates among women, especially in conservative societies.

The business sector in Islamic finance is lacking in financing and investment services aimed at women. It is also lacking in initiatives that enhance women’s contribution to the Islamic financial industry, such as the establishment of banks, and capital and investment companies that cater specifically for women. At this point I would like to pay tribute to the Kuwaiti Tejarati company, which was the first company to be established by women, targeting women as clients. We wish this company all the success, and hope that this encourages other types of initiatives.

In fact, the Islamic financial industry is not the only financial sector that neglects women, as this is something that is widely spreading to include the financial industry as a whole. This is why the International Finance Corporation in collaboration with a number of banks has sought to establish the Global Banking Alliance for Women. Their aim to take the necessary measures to ensure the speedy growth of the wealth of women by exchanging the best possible practices between financial institutions around the world.

“If a woman has to choose between catching a fly ball and saving an infant’s life, she will choose to save the infant’s life without even considering if there are men on base.” Dave Barry

Best Regards
ZULKIFLI HASAN
DURHAM, UK

Kyoto, Japan

Islamic Finance Educational Hub in the UK

Islamic finance hub opened at Aston Business School

By Anna Blackaby: Available at: http://www.birminghampost.net/birmingham-business/birmingham-business-news/financial-business-news/2010/01/19/islamic-finance-hub-opened-at-aston-business-school-65233-25628043/

Birmingham’s hopes to position itself as a centre for Islamic finance have moved up a notch after Aston Business School launched a ground-breaking Islamic Finance and Business Centre – the first of its kind in Europe. The centre has been developed as a result of a £1.5 million grant from Dubai-based business Surgi-Tech, the largest gift on record for the university.

It will be used to develop qualifications and advance research in the Islamic finance field. To be named after the director of Surgi-Tech, the El Shaarani Centre for Islamic Finance and Business will develop a suite of qualifications on Islamic finance for 2010, including undergraduate, postgraduate, PhD and executive programmes.

It will also continue with research into Islamic Finance and Shariah-compliant business, developing Islamic finance solutions for companies and providing an advisory service to the government and the commercial sector. The university said the sponsorship came as a result of Aston Business School’s excellent global reputation and the prestige of associating a Middle Eastern company with a UK university.

Dr El Shaarani, chief executive of Surgi-Tech Group, Dubai, said: “We are honoured to sponsor a UK business school as prestigious as Aston and help to fund research that will explore the role of Islamic finance in the future global financial system. “We believe that the creation of this centre will result in the development of new financial tools that will attract greater foreign investment to the West Midlands region. We look forward to continuing a prosperous relationship with Aston University.”

Dr Omneya Abdelsalam, Director of the Islamic Finance and Business Centre, Aston University, added: “We’d like to take this opportunity to thank the Surgi-Tech Group for their generous support. With their assistance, Aston has established this centre to meet the growing interest in Shariah-complaint finance across the world.

“Through the centre we will educate the next generation of Islamic economists and business leaders – both nationally and internationally. “Our research will allow us to investigate how mainstream financial institutions can learn from Islamic finance practices in their recovery from and avoidance of the next global economic crisis.”

The El Shaarani Centre for Islamic Finance and Business plans to exploit Birmingham’s large concentration of professional financial and legal services and culturally diverse business community to reposition the city as a centre for Islamic finance. A suite of executive education programmes in Islamic finance will be launched by Aston Business School in summer 2010, followed by a Masters qualification in the subject in October.

“The difference between school and life? In school, you’re taught a lesson and then given a test. In life, you’re given a test that teaches you a lesson.” Tom Bodett

Best Regards
ZULKIFLI HASAN
DURHAM, UK

With Sheikh Amen Fatih in Dubai.

French Study on Islamic Finance

French study on Islamic finance ready next month
Available at: http://www.gulfbase.com/site/interface/NewsArchiveDetails.aspx?n=123193

The French Institute for Islamic Finance (FIIF) announced here Monday that the team responsible for Islamic Finance affairs in France will submit a study on Islamic contracts next February. Head of FIIF Mohammad Nouri told KUNA that the team, formed by the advisor of Minister of Economic Affairs, Industry, and Employment Christine Lagarde, will submit their study on Murabaha (a kind of sale which is compliant with Islamic Sharia), Sokuk (Islamic bounds), and Ijara (Lease-to-Own).

The study also covers Istisna’ (an agreement to sell to or buy a non-existent asset to be made or built based on specifications outlined by ultimate buyers at an agreed predetermined selling price and to be delivered on a specific future date).

The team, which consists of Banque de France (bank of France), counseling offices, legal offices, and FIIF, meets every two weeks to study laws and legislation on Islamic financing, he pointed out. He stressed that Islamic finance attracts people around the world, especially following the world economic crisis, the decrease of liquidity, and the increase of international deficit, adding that France suffers a deficit of about 100 billion euros.

French officials realized that the cause of the crisis was the big connection with virtual economy rather than “real” products, he said. In addition, economic banking proved it was special and efficient, technically and profit-wise, and was based on simple principles understood by the public, he noted.

Nouri said the French government became aware of that last factor, especially after it noticed the big steps by the United Kingdom to attract substantial capital from the Islamic world. France is paving way for Paris to become a major western and European center that attracts Islamic banks, he emphasized.

The start of this effort was with an expression of a political desire with the announcement of the president, finance minister, and central bank governor, he said. This was followed by media, political, legal, and legislative action, including research, seminars, lectures, and other academic input, he said.

Saying he was opposed to changing the unique characteristics of Islamic finance, he noted the issue was one of credibility. He stressed that Islamic finance was an international system that many countries benefited from by now, including Japan, the United States, China, and Russia, noting that France will issue Sokouk this year.

In 2009, real estate Murabaha operations of three billion euros were made, he said, adding that France aims to reach 100 billion euros in this category. Nouri pointed out FIIF was established in 2008 to sponsor Islamic finance in France. It includes a group of Muslim scholars, economists, bankers, and legal figures who have knowledge about French laws. The institute also interacts and cooperates with scholars from different Islamic countries who have expertise in Islamic finance.

“If my theory of relativity is proven successful, Germany will claim me as a German and France will declare that I am a citizen of the world. Should my theory prove untrue, France will say that I am a German and Germany will declare that I am a Jew.” Albert Einstein

Best Regards
ZULKIFLI HASAN

Dubai International Financial Centre

Tomorrow’s business leaders should focus more on business ethics and stakeholders instead of concentrating on profit and shareholders

MBAs should focus more on business ethics
Available at: http://www.dur.ac.uk/news/newsitem/?itemno=9146

Tomorrow’s business leaders should focus more on business ethics and stakeholders instead of concentrating on profit and shareholders, according to new research involving Durham University. During the economic downturn business schools were criticised for producing graduates obsessed with shareholder value and high risk growth strategies.

However according to the findings of the Research & Consultancy Centre at the Association of MBAs, in partnership with Durham University’s Business School, it appears that the era of focusing solely on shareholder value above all else could well be over. When asked whether the MBA should adopt a stakeholder rather than a shareholder focus, almost eight out of 10 (79 per cent) of business schools agreed that to a large or very large extent that this should be the case.

The majority of alumni also agree that the MBA should adopt a stakeholder rather than just a shareholder focus on the bottom-line (59 per cent). In the late 1980s and 1990s, when many of today’s corporate leaders were studying for their MBA, concerns about business ethics and sustainability played little part in the curriculum.

Mirroring the shift for greater transparency and accountability in business today, eight out of 10 (83 per cent) of alumni surveyed agreed that ethics have become important or very important, whilst three-quarters (75 per cent) said that corporate governance is now important or very important. In turn, 80 per cent of business schools agreed to a large or very large extent that corporate social responsibility should underpin the actions of organisations.

When asked how the MBA could better prepare students post-downturn, almost half (46 per cent) of the respondents raised issues relating to sustainability or ethics. However, it appears that schools have taken this point on board as when asked to rate the importance of various topics in today’s economic climate business ethics came top (4.59, where 5 is rated as “very important.”). The research included a total of 100 business schools as well as 544 alumni from 57 countries across the world. In terms of their roles and responsibilities, half of the alumni were senior managers or above, with almost a tenth at CEO/president level.

Commenting on the findings, Professor Rob Dixon, Dean of Durham University’s Business School said: “The economic crisis has shown that we can’t simply expect things to go on as they were. “It’s not just all about profit. Business schools are helping to build a new way of doing business, one that doesn’t put the interests of shareholders above all other stakeholders. “Business needs well rounded executives with strong leadership skills and the ability to integrate ethical, sustainable and stakeholder thinking into their management decisions.”

Other key findings of the research include:

Risk management: Business schools acknowledge that both risk management and strategic risk are two of the top three topics where there is the widest disconnect between what they offer in the current curriculum and what they ought to be offering in the post-downturn world.

A qualification for challenging times: Seven out of 10 (70 per cent) of MBAs agree or strongly agree that their business education helps them to manage change, while six out of 10 (59 per cent) said it prepared them to deal with uncertainty.

Maintaining edge: Business schools appear committed to maintaining the relevance of their MBA programmes. More than nine out of 10 (94 per cent) had undergone a full re-design of their curriculum within the previous five years.

Adds Accreditation Project Manager, Mark Stoddard of the Association of MBAs: “The report provides a clear consensus on the direction the MBA needs to take and will encourage important debate amongst the business school community.

“Schools have been working hard to adapt the MBA to the changing demands of modern business, particularly in terms of developing a greater stakeholder focus for their programmes. “But the economic crisis highlights the need for further change, including a broader, skills-focused and integrated curriculum with more extensive coverage of ethics, risk management and sustainable business practices.“

“Ethics is not definable, is not implementable, because it is not conscious; it involves not only our thinking, but also our feeling.” Valdemar W. Setzer

Best Regards
ZULKIFLI HASAN
DURHAM, UK

The Louvre Museum, Paris

GCC remains dominant in Islamic finance

GCC remains dominant in Islamic finance
Abdul Jalil Mustafa | Arab News Available at: http://www.arabnews.com/?page=6&section=0&article=131017&d=11&m=1&y=2010&pix=business.jpg&category=Business

AMMAN: The Islamic financial system gained additional popularity in 2009, thanks to the relative immunity it enjoyed from the fallout of the financial crisis. The widely perceived viewpoint that Shariah-compliant financial institutions had passed the global credit crisis nearly unscathed is presenting the Islamic financial industry to many non-Muslim investors in the world as a safe haven from speculative excesses.

“We have reports that countries such as France, Australia and Japan are now mulling the introduction of Islamic banking into their financial systems,” Musa Shehadeh, general manager of the Jordan Islamic Bank said. Investors traumatized by the credit crisis apparently found comfort from the stricter rules imposed on lending by Islamic law, which considers the payment of interest as usury, thus banning the structures and financing methods that quickly unraveled during the US mortgage crisis at the end of 2008, Shehadeh said.

According to a study published in November by the Banker Magazine in association with HSBC Amanah, Islamic finance continued double digit growth despite global crisis in 2009. The survey, that covered top 500 Islamic financial institutions, showed that assets held by fully Shariah-compliant banks or Islamic banking windows of conventional banks rose by 28.6 percent to $822 billion from $639 billion in 2008.

This result contrasted sharply with a Banker study released in July which showed that the world’s top 1,000 conventional banks achieved an annual asset growth of just 6.8 percent. “The Islamic finance industry continues to build a solid track record: The compound annual growth rate for 2006-2009 is 27.86 percent, with assets forecast to hit $1.033 trillion in 2010,” the study said.

The six Gulf Cooperation Council (GCC) member states remained the dominant segment of Islamic finance, with $353.2 billion or 42.9 percent of he total global aggregate, according to the study. Iran remains the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the global aggregate.

Outside the Middle East, Malaysia is by far the largest player, accounting for 10.5 percent of the global aggregate, but other markets are expanding rapidly. The United Kingdom now accounts for just under 2.5 percent of the world’s Shariah-compliant assets. “Apparently, Islamic finance sectors are attracting larger amounts of investment funds against the backdrop of being the least affected as a result of the global financial crisis,” Salah Shalhoub, professor of Islamic financing at the Dhahran-based King Fahd University for Petroleum and Minerals, told the Dubai-based Arabic version of the CNBC television.

“Demand has also substantially increased for Islamic tools and bonds, known as sukuk, due to the shortage of liquidity that can be obtained from conventional banks,” he added. However, the image of the booming Islamic finance seemed to have been marred at the end of November with the declaration by the state-run Dubai World conglomerate that it was asking creditors of two of its flagship real estate firms-Nakheel World and Limitless World – for a standstill on debt worth of tens of billions of dollars.

The two subsidiaries are run according to Islamic law through the issuance of billions of dollars worth of sukuk. Some analysts expected Islamic finance to be at risk as a result of the Dubai World debt crisis, but Hanaa Hunaiti, professor of Islamic Economics at the Amman Arab University for Higher Studies, believes the problem has nothing to do with Islamic finance. “Nobody said that the problem was because of sukuk, which as a matter of fact can lead either to profit or loss according to Islamic law,” Hunaiti said.

“I believe it is a short-lived ordeal that certainly will be dealt with in a satisfactory manner, given the assurances made by UAE officials that the emirate will be able to repay all its debts,” she added. However, other analysts suggested the focus of Islamic finance could be shifted from Dubai to Saudi Arabia, Qatar and Bahrain in 2010 pending the settlement of the Dubai World debt crisis. This vision was supported by a report issued recently by the Saudi chambers of commerce which expected investment funds to change their direction from Dubai to Saudi Arabia. “An opportunity now exists for Saudi Arabia to lead the forthcoming wave of the Islamic finance industry in the Gulf as the kingdom possesses all qualifications of this leadership, including the necessary infrastructure and guidelines,” the report said.

“You will become as small as your controlling desire; as great as your dominant aspiration”, James Allen

Best Regards
ZULKIFLI HASAN
DURHAM, UK

Milan, Italy