Post by Daniela Olivier
More and more institutions around the world are offering degree programs and diplomas in Islamic Finance and banking. This is regarded to be a good sign, showing that the sector is growing and that there is big demand in well-educated and trained individuals. However the medal has two sides: Every year more and more students are graduating and also it seems that Islamic banks are growing globally.
However, we don’t see fresh graduates entering the job market yet. There are some, but not too many, job openings in different fields of Islamic Finance. Nevertheless most times banks look for more senior employees with at least 5 years of work experience, preferably in the Islamic Finance and banking sector. Another major issue which makes it hard for fresh graduates entering jobs is the spreading nationalization in many countries. For example in the United Arab Emirates, certain jobs are only open for Emirati nationals. In the Kingdom of Saudi Arabia and Malaysia people with Saudi or Malaysian (Bumiputera) background are encouraged to apply for the positions available.
The Islamic Finance markets in Europe still need to develop and currently are only existent in the United Kingdom. One therefore asks where all the fresh graduates should work and be able to gain experience. It is clear that Universities are also institutions which want to generate money. There are currently no quotas for Islamic banking degree courses as for example we have for medicine or other overrun disciplines like psychology and business administration.
The INCEIF University in Kuala Lumpur Malaysia is providing their students the ability to get internships with the Islamic banks operating there. This is a first step to provide students with a practical insight into the field. Nevertheless to provide the graduates with the ability to join an Islamic bank and learn about the practical side from scratch they should take advantage from trainee programs which are already operated by every conventional bank. This would be also of benefit for the banks because they will be able to oblige the young bankers to work for them at least for three years due to several training programs.
In fact we already see a high number of former Islamic Finance students, sometimes with even more than one degree, not finding a job in the field. Some individuals are currently working “off the job” in conventional banking or Islamic Finance journalism due to the lack of offered jobs.
On the other side there are certain Shariah scholars who are on more than 50 Shariah boards of Islamic banks or Islamic institutions. This leads to problems regarding conflicts of interest. Currently the top 20 scholars are serving on 621 boards globally. The top scholars in this field are Sheikh Nazim Yaqubi, Mohammed Elgari, Mohammad Daud Bakar and Abdul Sattar Abu Ghuddah. Due to the need of an interdisciplinary background of finance, Shariah law and banking law it is hard to find qualified scholars in this field.
One notices that on the one hand the Universities and institutes are producing graduates with a broad knowledge of Islamic finance the lack in human capital however can be found in the roles of Shariah scholars. It would be only honest from Universities and institutes to inform students before commencing studies about the current outlook in the job market. Of course it is also the task of the future students to make research if studying Islamic Finance or banking will lead to a job afterwards.
The biggest problem currently faced by a lot of graduates is to be not able to practice their theoretical background. To fight this pool of unused potentials universities could set up a graduate’s information portal which should be available to all Islamic banks and institutions, providing information like grades, major study fields, language of the students and more. Through this tool, banks would easily be able to find the right candidates in a short period of time.
Major issues that need to be addressed:
- Educational offers from the EU and Australia are too promising because right now there are no job openings for graduates. When the Islamic finance sector will start operating the companies will ask for people with experience in IF. People with previous background in conventionalbanking/insurance will not be considered.
- Competition should be healthy. Therefore any kind of nationalization is only minimizing the field of people with a broad multinational background and if you just cross people out because they are not Saudi, Emirati, Malaysian, Australian, and British… it will not help the economy to develop to its best.
- Qualifications like CFA, CAIA, and CIFP are no guarantees for a job. Also they are very high in cost. Also graduates are not the adressees of such qualification programmes but practitioners with some years of experience. It would be better to get fresh graduates to work for a company and try to tie them for some years with the outlook of receiving the opportunity to get the courses paid by them.
 As it is practiced in Austria
- E.P.L. in Islamic Finance: EDUCATION – How & What (benefitpoint.wordpress.com)
- What if the world had been following Islamic financial practices? | Imaduddin Ahmed (guardian.co.uk)