Time for change in Islamic finance

Reading the article Why are we seeing so many corporate scandals?  
By Prof. Dr. Amit S. Mukherjee  I liked the questions that Prof. Amit raises.
The queries resonated with the planner in me and I found them to be interesting. I say interesting because, whilst the erosion of trust has impacted quite heavily on the financial sector and probably enabled the growth of technology based financial solutions or FinTech, these questions are very valid across all industries including the Islamic finance industry.

Here are the questions Prof. Dr. Amit raises:

  1. Have we rethought how we work in a digital age when work increasingly requires large doses of unseen discretionary effort?
  2. Have we redesigned processes and structures to surface problems before these become crises?
  3. Have we allowed the free flow of key information to distributed decision makers?
  4. Have we created collaborative, learning-focused cultures?

Looking at the environment, in which the Islamic finance industry is operating, currently makes these questions quite critical, from an organizational perspective, with regards to sustainability of the various business models
in operation.

There are three key issues that get highlighted when one runs the above mentioned questions through business continuity thinking.

Starting with talent management & development and its allied areas of
learning & development, given the necessity of managing increasing numbers of Millennials, entering the workforce, along with providing gender diversity and equality coupled with ensuring professional development of the existing employees, the need to develop and incorporate digital and its various usages in work and its processes assume significant importance.

This leads into the second key issue of leadership competency.

On one hand erosion of trust, in financial institutions is at an all-time high, on the other technology in the form of social media has made the world a very small place where real-time personal engagement and word-of-mouth recommendation is given preference over any corporate statement or communication. This has created a need for a different type of leadership competency requirement. The control & command leadership style of yesteryear simply does not work in a world where knowledge and technology are driving the comparative advantage for an organization. There is a serious need for industry leadership to be empathetic and transparent in order to create engagement with society and employees simultaneously in order to develop social capital for the organization, from a business continuity perspective.

Thirdly is the issue of technology and its impact.

FinTech, in its various forms, has already impacted the conventional financial sector greatly by disrupting the historical business models. The driving force behind this technology usage and acceptance is the development of the smart phone technology and the need for the layman to have direct and quick access to finances. Add to this the developments taking place in the Islamic economy industry verticals, such as the increasing demand for innovative financing by the start-ups and entrepreneurial ventures, and you have a potential scenario of the Islamic finance industry losing out on big-time growth opportunities as these opportunities will get fulfilled by new financial start-ups who are agile and able to collaborate faster, as maybe required, with the changes in the regulatory landscape.

Whilst asset growth, increase in Islamic social responsible investment and convergence of ESG and Islamic finance are occurring  we, the individual organizations of the  industry, need to create strong sustainability and continuity plans to protect ourselves from further economic upheavals which are still bound to happen. 

Quoting Dave Ulrich‘Wars are won through organisation and you have victory by being in it together.’

This can only happen when we focus on people—employees, customers and partners—and look at the experience we deliver to them and the social issues we solve in order to create and retain engagement and build social capital in our mission for business sustainability.




Leadership for Business Sustainability in the Islamic Economy

Sustainable Visual Courtesy: www.sumall.com
Visual Courtesy: http://www.sumall.com

Last week in my post on Sustainability in the Islamic Economy I highlighted the key missing aspect of sustainability and how it has to be from ground-up.

There are four broad areas to look into when scoping out sustainability for a business:

  1. Leadership
  2. Processes
  3. People
  4. Communication

This is not only for the businesses that are operating in the Halal or Islamic Finance space, but involves businesses in any  industry sectors. Coming home to the issue of developing a ‘capital’ or ‘hub’ for Islamic economy, Dubai has focused on the following key industries (U.A.E.’s 7 pillared strategy):

  1. Tourism: Impacting on the hospitality industry organisations covering both halal-friendly tourism for the global Muslim community & general tourism.
  2. Information Tech: Islamic e-commerce & digital economy impacts specifically on software development, web & system architecture oriented organisations.
  3. Education: For knowledge, training & research. Impacts all learning & training institutions both private and public.

These three key industries have been identified as part of the six key industries  in making Dubai an Islamic Economic capital. The other three industries are the financial services, Halal Food & Halal standardisation sectors.

Coming back to why sustainability is a key success factor and why we need to evaluate this right at start let’s look at what’s happening at the ground level:

  • Given the extremely tight timeline (of three years to establish Dubai as the Islamic economic capital), organisations in these six industries are faced with having to re-align their business plans with key industry goals so that milestones are achieved.
  • Simultaneously, between the core industries of Islamic Finance & Halal, a lot more collaboration has become the need of the hour.

There are two scenarios business can proceed on now—either continue with their own business plans or actually understand how they can contribute to the agenda set, re-calibrate their plans quickly, obtain the necessary resources and get going.

Whichever option businesses select, one critical need emerges clearly– Key human resource, having both technical & behavioural competencies, need to be in specific positions necessary in driving the respective businesses in achieving their goals—in short there is an acute need of strong, capable and visionary Leadership  organisation & industry level.

Without doubt, for any organisation in any industry, leadership is the key in ensuring achievement of goals. There are some key areas of leadership that need to be present for projects of this magnitude:

The question to ask ourselves now is this– Will we review & evaluate if we have the required leadership?  This will need some deep soul-searching and authenticity in answering.

Given rising calls for transparency and authenticity, business leaders would now have to discuss  leadership in a different light if they are interested in aiding in the establishment of the ‘Islamic economy’.


Critical brand risks in marketing to the Global Muslim Community

Risk scenario planning (visual courtsey http://www.ficsas.com)

The global Muslim community at a staggering 1.57 billion people is a very large market segment that’s intriguing marketers, across product categories, for a variety of reasons. With a rising demand for products and services, fulfilling needs of day-to-day life to aspirational requirements and armed with strong purchasing power, the global Muslim community is a very attractive consumer segment to businesses.

From the perspective of market entry planning for a brand, it’s no different from entering any other market or segment.

  • Identifying the key markets,
  • Researching the impact of the existing product portfolio on the market segment,
  • Evaluating the competitions’ actions to benchmark and obtain best practices and
  • Doing an opportunity cost analysis to obtain earnings and brand sustainability are all part of the basic market entry planning.

But this is where the conformity changes!
Unlike other cultural consumer segments the global Muslim consumer segment is made up of a myriad of sociocultural sets that have been influenced by emigration (of the community)  and adaptation to social and environmental norms of current place of residence and livelihood. Thus producing today’s Muslim consumer who has a strong , individual value system and identity that is based and governed by the core values of  “Halal”(Halal is an Arabic term meaning “lawful or permissible” and not only encompasses food and drink, but all matters of daily life. Ref: isahalal).

An article in the Marketing Week highlighted that “Muslim consumers are a growing, influential and extremely loyal group, making them a desirable market for mainstream brands. But reaching them requires more than launching Sharia-compliant products. Making inroads to this sector takes a deep understanding of the values of this community and building the brand from there. They’re young, ambitious and worth at least $2 trillion globally”. The key words being “deep understanding of the values of this community and building the brand from there”.

Thus, simply communicating and delivering a fulfilling brand experience based on product or service innovations would not suffice for this segment.In order to win the loyalty of this segment the brand has to approach the relationship (with the Muslim consumer from a totally different paradigm). In order to gain the trust of this consumer, adherence to the required standards (halal guidelines) and transparency in (the brands’) operations and activities is a must.

Building a brand in this segment differs (from other consumer segments) in terms of risk and organisational demands.The risks should not be underestimated. They should be thoroughly studied and evaluated on two levels:

  • Product/Brand level– A product and brand risk analysis will consider the impact that targeting the Muslim consumers might have on the organisation’s core global brand if the product is sold in non-Islamic markets.
  • Corporate level– A corporate level risk analysis will take into account a wider view of potential transnational consumer activism, thereby, enabling the organisation to be ready to deal with at least three potential threats— social, political and financial.
  1. Social Risk: by virtue of their numerical strength and purchasing power the Muslim consumer can choose “not to buy”. Such “not to buy” acts are not uncommon. Recall the indignation and subsequently the impact the global Muslim community had over the publication of cartoons of our beloved Prophet (P.B.U.H) in a Danish newspaper. The subsequent lack of political and cultural empathy led to a widespread boycott of Danish products to the extent that even western retailers removed Danish products from their shelves due to fear of negative repercussions.
  2. Political Risk: Given the rising awareness of Islam, and a new-found resurgence of the Muslim identity, governments across Muslim countries have responded with regulatory changes. Malaysia, for example, has created its competitive advantage by promoting halal foods, Islamic Finance and halal tourism. Kuwait, had its first women ministers a year ago (ref:www.guardian.co.uk).
  3. Financial Risk: An existing organisation has to evaluate the potential ‘fallout’ that may occur through alienating the existing consumer base by entering the Muslim consumer segment AND also has to check potential revenue loss from not correctly serving the Muslim consumer. This needs to be balanced out versus the projected revenue growth expected from serving the Muslim segment.

Lastly, there is a risk of a “backlash” if the organisations are seen to be exploiting the Muslim consumer. With the rise of social media, and “interest based communities” being online 24/7, blurring geographical and cultural distinctions, a backlash (on a brand) can spread like bushfire through the global Muslim community in a matter of hours. Thus affecting the brand not in just one specific region but globally across the markets it’s present in. One way to minimise this risk is to ensure that the brands’ and the organisations’ activities benefit the community .

The Muslim consumers seek reassurance that any brand offer from an organisation is not just a “marketing ploy”. They want to feel that the brand genuinely understands and empathise with Islamic values in all aspects of their operations. Towards this, communicating transparently and providing a beneficial and meaningful brand experience will enable a brand to reduce and control risk to a great extent in marketing to the Global Muslim Community.

Meet The New Muslim Consumer

In the midst of preparing for an interview (on the topic of  Islamic Marketing) I came across this interview of mine on the “new Muslim consumer” which was published last year.  I felt, it might be helpful reading for many who are operating businesses in this sector as well as working in the Halal & Islamic Finance industries.

Comments, thoughts and opinions welcome.

“Halal & Shariah Compliant”– Processes or Values?

Process OR Values?

With 23% or 1.57 billion people constituting the global Muslim community, a whole lot has already been written and said about the ever-increasing business opportunities in the (and for the) Halal industry.  With the industry’s global annual meet coming up (in Kuala Lumpur in April) more of these opportunities would get highlighted.

So here’s a question for businesses (in the industry) as well as those evalutating the potential:
Do businesses (
in this category) understand who their customers are and what they want?



This question came up whilst in a discussion with a very learned friend of mine (in Islamic finance) on the key issue of– “Is Halal & Shari’ah a Process or are they Value concepts”.

Whilst the (current) issues of convergence (of the Islamic Finance and Halal industries) and its potential (or should one say explosive!) growth and emergence of new product and service segments (fashion, cosmetics, hospitality) are being thrashed out,    the key issues of consumer intelligence (and insight for business growth planning), comprehension (of the terms Halal and Shari’ah by the consumers) and understanding of the latent emotional need (of the consumer) for a specific value system from commercial enterprises still remains unanswered.

A lot of consumer and corporate research has been done (and is available), by highly experienced and professional organisations, covering specific areas of information that’s extremely helpful in business planning.

Yet on-ground activties by Halal and Islamic Finance organisations still show a high extent of  “head-in-the-clouds” type of business approach.  The consumer world has changed. Within that the global muslim community (as the mainstay for both Halal and Islamic Finance has undergone a paradigm shift in their attitudes, perceptions and behaviour)!

Isn’t it time we left the cool comforts of our air-conditioned offices and actually spoke to end-users of our products and services and understood how, by delivering a value-benefit can we (as commercial businesses) be sustainable, profitable and respected?

For starters the two industries could get consumer-centric and undertake market education on the two basic terms–
Halal & Shari’ah compliant– and establish if they are processes or values.

Let’s take a quick look at some basic definations:

Halal–“as per Wikipedia”–> Halal (Arabic:حلال, ḥalāl, Halaal; means lawful or legal) is an Arabic term designating any object or an action which is permissible to use or engage in, according to Islamic law. It is the opposite of haraam. The term is widely used to designate food seen as permissible according to Islamic law (Sharia, الشريعة الإسلامية).

Usage of the term:
The use of the term varies between Arabic-speaking communities and non-Arabic-speaking ones.

In Arabic-speaking countries, the term is used to describe anything permissible under Islamic law, in contrast to haraam, that which is forbidden. This includes human behavior, speech communication, clothing, conduct, manner and dietary laws.

In non-Arabic-speaking countries, the term is most commonly used in the narrower context of just Muslim dietary laws, especially where meat and poultry are concerned, though it can be used for the more general meaning, as well.

Shariah Compliant–>Shariah (Arabic: ‘‎شريعة Šarīʿa; [ʃɑˈriːɑ]) is an Arabic word meaning ‘way’ or ‘path’. It is used to refer both to the Islamic system of law and the totality of the Islamic way of life. Sharia deals with many things, including politics, economics, banking, business, contracts, family, sexuality, hygiene, and social issues.

Usage of the term:
Came about from Islamic banking–(as per Wikipedia)–Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics.

I looked into how these words/terms are actually comprehended and, surprisingly, I came across a few references of how often “halal” is not understood clearly, and is associated only with food and how Muslims consumers themselves are, a bit in the dark due to lack of transparent information.

A dipstick study in UK (in this context) reveals:
The word ‘halal’ is used mainly in the food context, as being clean and pure. Shariah is understood as Islamic law.

Here’s some published references:

  1. Consumers Need More Info on Halal Issues
    KUALA LUMPUR, (Bernama) — There is a dearth of information regarding the halal status on many of the products consumed or used by Muslims. Therefore, it is only appropriate that that Muslims are provided with the information that they need and one of the easiest way to provide the required information is through the details on the packaging.
  2. Halal Is Not A Simple Matter
    On and off Muslims in the nation are startled by claims that the Halal status for some of the products that they consume were doubtful, and the immediate reaction is Muslim consumers become more circumspect in buying the related products.
  3. It’s Not The Halal You Expected
    As debate and discussion on the meaning of halal grows, mainstream supermarkets, food producers, and restaurants are finding that there is plenty of overlap between traditional definitions of halal food and Western standards of quality and ethics.

These few bytes of news reports and feedback from some Muslim friends and associates (of various nationalities) clearly brings forth, that the common man’s usage of the terms and their comprehension are not the same all over. Infact, the perception is that, “Halal is the process of meat and poultry products, slaughtered as per the process and packed/processed according to the country’s halal certification process”.

Shari’ah, on the other hand, is associated with Islamic financial products that adhere to the principles of Islamic law.

But Halal and  Shari’ah are much more than this current comprehension!

The questions that arise are:

  1. Are Halal & Shari’ah compliance only processes then?
  2. Or are they “value concepts” that can be used to develop sustainable business strategies that deliver benefits?

Intriguing questions,as in the spirit of Shari’ah, a business is deemed halal if it is, end to end, adhering to certain principles and not just the manufacturing or slaughtering process.For eg: if a food brand, marketing canned beef obtains the halal certification, but its business operations like financing is using conventional finance and its organisational culture is not based on Islamic ethics and its governance is more regulatory than civic responsibility oriented–Is it truly Halal?

Similarly, if a financial product re-words, re-processes the ‘interest’ component in its product make up and ‘complies’ with known Islamic financial legalities and becomes ‘shariah-compliant’ does that make the product halal?

Questions to which,perhaps, there will be clear answers  once organisations (in these two industries) undergo a cultural shift and look at Halal and Shari’ah as (critically needed) ethical values and focus on being consumer-centric in their business planning in order to be sustainably competitive across time. Such a change will provide organisations a new business model that would be fully value centric than the current practice of being stakeholder profit centric.

Can Islamic Finance Innovate for Sustainability & Growth?

Post By Michael Damian Billy

The Next Generation of Islamic Finance Asset/Cash Management:
Who will provide the dynamics for an “idea system” that creates and innovates the processes in 2011 and Beyond?


While there has been formal discussions held within the Islamic Finance community over the past year, regarding product development; acceptable investment practices and execution applications, several key issues remain primary topics for exploration. The most critical is who will take on the leadership role and for what purpose.

One prominent international Shariah advisor to the Islamic finance industry that is providing a catalytic perspective is      Muhammed Elgari of Saudi Arabia.

Excepted from a recent Arabnews.com article, Elgari is the first prominent scholar to emphatically call for a scientific approach to Shariah compliance. This follows a similar call by another prominent Shariah scholar; Sheikh Esam Ishaq of Bahrain, those Shariah advisories serving the Islamic finance industry should be regulated.

He advises fellow Shariah advisories to adopt a scientific method in reaching their deliberations on Islamic finance. “To be respected,” said Elgari, “Shariah scholars should follow scientific methods to reach their conclusions. We have seen many mistakes where declarations have been issued. Only the correct resolutions will prevail. Shariah is not a group of infallible people. It is a science. It requires methodology, and resolutions require peer review and market consultation.”

Of equal importance regarding momentum and innovation is what component, or participant of Islamic Finance, will build upon his foundational guidance to create an “idea system” to exist and flourish?

As a prolusion, I want to refer to a quote made by John Cleese, the well-known English actor, film producer, comedian and writer who is now Provost’s Visiting Professor at Cornell University.

He stated “we all operate in two contrasting modes, which might be called open and closed. The open mode is more relaxed, more receptive, more exploratory, more democratic, more playful and more humorous. The closed mode is the tighter, more rigid, more hierarchical, more tunnel-visioned.”

Most people unfortunately spend most of their time in the closed mode.

Cleese further states “we must return to the “open” mode, because in that mode we are the most aware, most receptive, most creative, and therefore at our most intelligent level.”

His perspective is aligned with the task before every conventional, investment and development bank. The “idea system” is also integral to serving the progressive goals and objectives of holding and takaful companies. Inclusive are all of the various tangential participants, factions and governance authorities.

No matter what global culture or facet is involved, creativity and innovation are crucial to business sustainability and growth. And therefore supports and nourishes modern civilizations.

Where does the momentum come from and who takes the lead?

At the crossroads, Islamic Finance asset/cash managers must decide on whether existing rules and financial oversight allow it to enter the new decade with a progressive perspective.

Simply stated, Shariah law compliance and its role within the IF banking industry has become generationally rooted.

When managed by the present generation, priorities focus on creating and innovating current products, service, processes and paradigms. When companies become preoccupied with their present business, they diminish the contributions from those who look to the future.

The next generation understands that its current portfolio of products, services and processes will eventually mature and decline due to client/customer dissatisfaction linked to benefits or rewards.

Asset/cash managers need to start seeding and feeding ideas into the governing authority process, whereby their contributions that can be monetized and tied to newer and greater asset class diversification. Hence, a new revenue stream is borne that has greater profit potential and a wider acceptance.

If the goal of Islamic Finance is growth over the next decades, a full pipeline of ideas must be present and be encouraged. To sustain the momentum, replenishment must outpace products that become less attractive due to a lack of originality; market responsiveness and client reward.

Excerpted from an article written by Clifford Chance in Euromoney’s ‘Islamic Finance Review 2009–2010’, “Shariah scholars are increasingly taking the view that as Islamic finance is getting more sophisticated, investors should be able to enter into hedging arrangements. “

For a long time, the lack of acceptability was due to fact that speculation was a broad brush categorization. Interest rate swaps, Murabaha-based products as well as Wa’ad-structured products, such as currency swaps or FX options, all form part of the Islamic financial landscape. Those types of innovative Islamic financial risk management products represent Islamic Finance’s entrée in 2011 and growth beyond.

At the core of implementation should be the crystallization of principles and scope. Who better to foster this evolution than the asset managers who have the daily responsibility for undertaking the enlightened process?

Why Islamic Golden Age sciences need to be embedded into the “idea system”?

The Islamic Golden Age, or as it is often referred to as The Islamic (Abbasid) Caliphate, is traditionally dated from 622 to 1600 A.D. During this period, artists, engineers, scholars, poets, philosophers, geographers and traders in the Islamic world contributed to agriculture, the arts, economics, industry, law, literature, navigation, philosophy, sciences, sociology, and technology, both by preserving earlier traditions and by adding inventions and innovations of their own.

The works of Aristotle, Archimedes, Galen, Ptolemy, Euclid, and others were the wellspring of science during the Medieval Period. Islamic scholars translated them into Arabic, the lingua franca of this period.

Islamic scholarship also inherited Aristotelian physics from the Greeks and during the Islamic Golden Age developed it further, especially placing emphasis on observation and a priori reasoning, formulating crude forms of the scientific method.

It is unfortunate and defeating that advances in statistics, physics and other forms of mathematics are not being utilized in todays Islamic Finance banking environment. Refined, they can comply with non-riba transaction and non-speculative execution standards. Why these methodologies are not being used to thwart a myriad of risks is another question that remains unanswered.

Setting those financial and beneficial advancements aside, international, regional and secular banks cannot ignore the fact they an escalating inflation environment will challenge all product purveyors. The foremost challenge is to design offerings that combat interest rate risk.

A global issue confronting all countries, banks must counter its negative economic impact.

For Western banks, the assets float with income assets, whereby the liabilities are fixed income liabilities. The risk comes from lower rates. Conversely, Islamic banks have fixed income assets whereby the liabilities are profit-sharing liabilities (not fixed.) Therefore, risk comes from higher rates.

Asset managers need to remain steadfast to the principles of product creation, i.e. creating a value proposition. Bells and whistles not required, but liquidity, interest rate and event-risk safeguards are mandatory.

What is the intent behind the tasking – symbolic or meaningful?

According to Harvard Business School Professor Teresa Amabile in ‘How to Kill Creativity’ (1998), she affirms that “In business, originality isn’t enough. To be creative, an idea must also be appropriate – useful and actionable. It must somehow influence the way business gets done – by improving a product, for instance, or by opening up a new way to approach a process.

No matter how minimal or massive the undertaking, the same principle applies, it has to equate to a value. While individuals can affiliate with symbolism, they nonetheless live in the real world. If no value is perceived, they will seek it out through alternative channels.

If economic principles are applicable to each component and contributor, why are Islamic Finance banks reticent to apply complimentary analysis that are derived from the Islamic Golden Age, when mathematics, physics and other sciences were integral for Islamic Finance to evolve its competencies?

Economic models could be greatly aided by quantitative risk management techniques. Their integration can redefine risk vs. profit opportunities that serve both the institutional and consumer markets. Profit and loss events becomes a more exacting outcome when the model allows for a higher level of scientific contribution that was acceptable during the Islamic Golden Age which is traditionally dated from the mid-7th century to the 13th century AD.

With optimism, the second generation of scholars and contributors to the “idea system” will accept the responsibility for allowing quantitative-orientated analysis and application to be utilized for the creation of a myriad of diversified asset class opportunities.

For those desiring to plant seeds and ideas that advance IF asset and cash management, I encourage each one of you to pursue an attempt wherein cultural, economic and social benefits are escalated. Likewise, all contributions should embrace the adaptation of advanced technology to produce an elevated product emergence that will generate a more widespread client appreciation and participation.


M. Damian Billy is the founder and Managing Director of Econophy Capital Advisors, a U.S-based asset manager that specializes in forward observation risk analytics focused on delivering global macro absolute return outcomes. To contact, please email mdbilly@econophy.com .


The above article was published in Islamic Finance News 2 Feb 2011 issue and reproduced here with permission.

E.P.L. in Islamic Finance: PERCEPTION– What is it?

Post By David Vicary


I am not going to start this article by trying to define “Perception”.  Suffice it to say that one person’s perception is likely to be another’s reality and vice-versa. In the world of Islamic Finance and Islam there are multiple misperceptions, many of which are based on a lack of education and a genuine unwillingness of many people to stop and think.

All too often it is easier to tune in to the media and have a nicely packaged solution for your questions, than to stop and think about what the real facts are and to draw your own conclusions!  I GUESS WE ARE ALL GUILTY OF THIS BEHAVIOUR FROM TIME TO TIME.

Let me give you some examples of misperceptions regarding Islamic Finance, which are based on recent personal experience.

Last year, at the request of the bank Negara Malaysia, I was invited to meet with several US State Department and White House officials, who were visiting Malaysia to find out more about Islamic Finance.  I was given their names and asked to meet them at the lobby of a well known hotel.  They were given my name as Daud Vicary Abdullah.

At the appointed time I arrived and had no problem spotting the US officials.  I went over, attired in one of my best bespoke pin-stripe suits and introduced myself as “Daud Vicary Abdullah and are you the representatives from the State Department?”
The response from the senior official took me somewhat by surprise “You don’t look like an Islamic Banker!” he said.
To which I responded “Who were you expecting.  Osama bin Laden?”
To be fair there were peels of laughter and we did have a very engaging couple of hours to follow, but it was that initial reaction that lingers in the memory.  Perceptions are interesting.

I would also like to share with you another recent example.

At the end of a one hour phone interview with an Australian Financial Journalist, which had gone well, as he had demonstrated that he grasped the subject, and was asking the right questions. He suddenly moved into “perception territory”.
“What if an Australian woman wanted to open an Islamic Bank Account?  Would she be allowed to?”
“Why do you ask that?” I responded.
“ Because we hear so much about negative behavior towards women in Islam”

On investigation, much of this negative behaviour was actually more to do with local tribal customs than Islam itself, but it was the association with Islam that was interesting and the fact that a seemingly intelligent reporter had not thought the whole thing through.  I wrapped up the conversation by mentioning that women’s rights to property were embedded in the Koran and also in the behavior of the Prophet (pbuh). In my own country, the UK, these rights were not given to women until the 1920’s with the passing of the Married Women’s Property Act.

So what do we do to help change these perceptions?

The solution is relatively easy.

Firstly we need to be sure of our facts.  That means more education and a deeper understanding.
Secondly, we must be prepared to stand up for what is right and defend the facts.

We cannot sit on the fence.  If we hear of something that is wrong and that demonstrates a poor perception of Islam and Islamic Finance, we should do our best to explain and correct in a non-confrontational way. We need to explain by speaking to people’s listening.  If they are not prepared to listen face to face then we need to seize every opportunity that we have in the media to explain the value proposition and demonstrate that Islamic Finance is for everyone.

Those of us who have the capability to explain should explain.  Those of us who do not yet feel capable to explain should study and debate in order to improve.  This is not going to be either an easy or a soon to be completed task.  It will require dedication and effort coupled with much persistence.

There is much to do and not a moment to lose.

Daud Vicary Abdullah


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I am not going to start this article by trying to define “Perception”.  Suffice it to say that one person’s perception is likely to be another’s reality and vice-versa. In the world of Islamic Finance and Islam there are multiple misperceptions, many of which are based on a lack of education (refer to my first article in this series) and a genuine unwillingness of many people to stop and think.  All too often it is easier to tune in to the media and have a nicely packaged solution for your questions, than to stop and think about what the real facts are and to draw your own conclusions!  I GUESS WE ARE ALL GUILTY OF THIS BEHAVIOUR FROM TIME TO TIME.