November 2, 2009
Islamic business wins academic following
by Hillary Brenhouse
The New York Times
At semiannual meetings of the International Monetary Fund and the World Bank in Istanbul last month, talk was largely dominated, inevitably, by the economic crisis and its aftermath. But suitably enough, given the location, another topic also came to the fore: the role of Islamic finance, a fast-developing sector of the global banking industry that has remained remarkably resilient through the slowdown.
With the value of assets in Islamic banks now close to $1 trillion and the industry growing at an estimated annual rate of 15 to 20 percent, business students are increasingly eager to cash in. Universities are increasingly offering new postgraduate programs in Islamic finance to help them do it.
Islamic financial products comply with Koranic prohibitions against charging interest and investing in morally dubious industries, such as alcohol and pornography, and lending is based on profit-sharing. At a time when Western banking and financial models have been thoroughly discredited, Islamic finance is enjoying an enviable reputation as a more reliable way to invest. HSBC in the United Kingdom is one of many Western institutions that now offer, among other products, Shariah-compliant mortgages and bank accounts.
"There is a substantial shortage of people familiar with Islamic financial principals in Western banks," said Philip Molyneux, head of the business school at Bangor University in Wales, which introduced M.A. and M.S. programs in Islamic banking and finance last year. "And they're all realizing that the Muslim population is a client base that it would be in their interest to cater to."
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