As highlighted in my earlier teaser post (EPL for Islamic Finance), I want to take a look at the impact of EPL on the development of Islamic Finance. E is for Education, P is for Perception and L is for Liquidity. My plan is to share with you some comments on each of these topics over the next couple of months. So here goes on Education.
From my perspective, as an Islamic Finance Practitioner and observer for the last 20 years, Education in Islamic Finance can be broken down into three key areas:-
- Industry training
- General Public Awareness
Let’s take a look at each of these areas in turn.
From an academic perspective there are now a number of courses in Islamic Finance being run at universities and business schools around the globe. This is a reflection, in part, that the Islamic Finance business is expanding and that there is a need to produce expertise in areas ranging from Sharia’a to product development. The structure and content of these courses vary from the very academic to the less academic with some industry content. All in all I would say that this is still a “work in progress” and there is still much to do and learn about providing the right structure and ammunition for young students who decide on embarking on such courses to get them ready for business and to be valuable to the ongoing development of the industry. This is, of course, a challenge throughout for academia, either getting students ready for the real world or preparing them for a lifetime of research. Both routes are relevant, but for Islamic Finance we have yet to get the balance right.
The cry from the industry and from regulators and indeed commentators is “feed us with more people to fuel the growth of the industry“. I think we need to temper the quantity with quality, because from where I sit, I am yet to be convinced that we are turning out enough people of real quality who are prepared and capable of taking the industry to the next level. As I said earlier, it is still a work in progress.
OK. Now it’s time to take a look at industry training. I think this topic can be broken down into two broad areas.
- The first is specific industry training, either for practitioners who want to build a broad area of skills in Islamic Finance and dedicate their lives to the industry OR develop specific skills, in depth, around key areas such as Shari’s, Risk management etc.
- The second area is the provision of training for those people who have a passing interest and want to learn more in order to understand the benefits that Islamic Finance can bring and capitalize on its opportunities.
These two broad areas need, in my opinion, different approaches. Not only in terms of content, but also, in terms of delivery method. Almost a case of “speaking to the listening of the student.”
I am afraid that there is a need for greater quality control throughout in this area. I have seen some awful examples of people jumping on the bandwagon in order to make a quick buck and try to deliver “quality” training. I have also seen the complete opposite, with relevant, well crafted, well thought through and well delivered content.
There is probably a need for more certification and the development of recognized industry standards. This will take time and in the meantime I am afraid that there will continue to be a good deal of muddling through. The only advice I can give is check with people you know and trust and ask for their feedback.
The final area I would like to address is raising general public awareness. Here I am NOT thinking about Islamic Finance training courses for everyone, but rather raising awareness through Financial Literacy training, on the salient points and value proposition of Islamic Finance.
Still the most frequently asked question I get is “do I have to be a Muslim to participate in Islamic Finance”. The answer is patently NO, but the number of people who ask it would indicate that this still not clear. I would also venture the thought that the general public at large does not have that much idea about conventional finance, let alone the Islamic variety. Here is a major opportunity to embark on financial literacy programs at schools and community centres so that everyone has the opportunity to understand the basics and make some more informed choices in areas that will impact on their day to day lives. In some way this type of education, which includes observations on Islamic Finance, will start helping to dispel some of the myths regarding Islam and Islamic Finance. That, however, is another story and one which I shall cover in my next article on PERCEPTION.
There is much to do and not a moment to lose.