6th WIRBC to Boost New Thinking in a Dynamic Region

Islamic banking has grown from a niche market into a mainstream industry. What seemed to be an  “utopian dream” more than two decades ago has now become a reality. Islamic financial service today is accepted worldwide as an ethical and viable financial system. Today Islamic banking is an increasingly visible alternative to conventional banks globally. It has also contributed to growth in the Islamic world by drawing the unbanked and under banked populations into the financial system and allowing risk sharing in regions that are subject to large stocks but few buffers.

Islamic banking has grown from a niche market into a mainstream industry. What seemed to be an  “utopian dream” more than two decades ago has now become a reality. Islamic financial service today is accepted worldwide as an ethical and viable financial system. Today Islamic banking is an increasingly visible alternative to conventional banks globally. It has also contributed to growth in the Islamic world by drawing the unbanked and under banked populations into the financial system and allowing risk sharing in regions that are subject to large stocks but few buffers.

According to reports published in Zawya.com – “ Global Islamic finance assets are expected to surpass the USD2tln mark in 2014. The proposition for Islamic finance manifests itself in the robust growth of assets from USD150.0bln in the  mid-1990s to approximately USD1.8tln as at end 2013. The industry’s strong performance over the years will be further augmented by the growing participation of the international financial community, particularly in the Islamic banking sector, as well as by the support of various key multilateral development entities in the efforts to spur the growth of the industry.”

Identifying the sources of Islamic banking’s expansion and ways to adhere its continued growth is therefore of great interest to policymakers. It is argued that strategic marketing is the key to phenomenal growth and is in fact the missing link. “The increase in islamic finance volume is based mainly on the increase of finance volume directed to individuals ( retail finance) due to the diversity of retail islamic finance modes such as Murabaha sale, Musawamah sale, Ijara Muntahia Bittamleek (IMB), Istisna’a sale, financing utilities based on Forward Ijara” Ijara Mawsufah fi Zimma” ….etc. Accordingly, this leads to increasing the financiers’ basis. Undoubtedly, the expansion in Islamic retail finance grants directed to individuals (retail banking) will lead to the increase in the share of islamic finance from the total retail finance which will result in increasing the volume of retail banking globally.” says Musa Shihadeh, Vice Chairman & CEO – Jordan Islamic Bank.

Musa Shihadeh, was one of the key speakers in the 5th World Islamic Retail Banking Conference, which was held in Dubai last November. According to him “ The World Islamic Retail Banking Conference (WIRBC) had a significant role in raising issues related to Islamic retail finance sector and how to develop financing this sector through taking into consideration the reality of granting this finance, challenges facing it and its future prospects.”

Likes:
0 0
Views:
714
Article Categories:
Islamic Finance

Leave a Reply

Your email address will not be published. Required fields are marked *