Fuelled by oil, the worldwide Islamic finance sector is growing by 15 to 20 percent a year but needs more specialists, an accounting body said on Wednesday, launching the first global qualification in the field.
The London-based Chartered Institute of Management Accountants (CIMA) said the industry was worth between 150 and 250 billion pounds ($300-500 billion) and that its rapid growth had fuelled a need for both Muslim and non-Muslim financial experts to boost their knowledge.
“We would like to establish a minimum global standard, to basically have consistency across a range of issues,” CIMA director of education Robert Jelly told Reuters on the sidelines of the launch in London. “This is the first step. It is not a religious product — it is a corporate product with a religious component.”
In the long term, CIMA wants to set up both a diploma and perhaps a Master’s degree in conjunction with a university.
Islam bans lending on interest as usury, effectively blocking off access to conventional financial bonds.
Financial products that comply with Islamic sharia law — and therefore involve no receipt of interest, or investment in alcohol, gambling or pornography — have expanded hugely in recent years. Islamic finance is based on the principle of sharing risk and reward amongst all participants in a venture.
Jelly said the boom was supported by rising oil revenues as crude prices have surged this year towards $100 a barrel, boosting spending power in the mostly Islamic Middle East.
This has in itself sparked wider growth in Gulf financial centres such as Dubai and Bahrain.
He said hundreds had expressed interest since the website for the certificate in Islamic finance went active on Tuesday.
GLOBAL SCHOLAR SHORTAGE
Jelly said the online course would take three to nine months to do part-time, and is meant for both Muslims and non-Muslims — from qualified accountants to government regulators, Western investment bankers and school leavers keen to enter the sector.
Keen to tap Middle East investment, Western firms and states are seen increasingly willing to issue their own Islamic bonds.
But experts warn the growth in Islamic finance is being dented by a shortage of specialist Islamic financial scholars, who can sit on advisory boards and give views on whether financial products truly meet Sharia requirements.
Last month, scholars at the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) said about 85 percent of Gulf Islamic bonds did not really comply with Islamic law.
Sharia expert Mohd Daud Bakar, chief executive officer of the Malaysia-based International Institute of Islamic Finance and who helped CIMA set up the course, said he believed there were only 20 to 30 such suitably skilled scholars in the world — despite a need for 50 to 60 more.
Training a scholar from scratch would take many years, he warned, although an already experienced Sharia scholar could learn the financial component in perhaps a couple of years of crash learning.
“The certificate will not make you a scholar,” he said. “It is meant to educate people and give them an understanding of Islamic finance. But it will be good for scholars to do this course because they can take note of trends around the world.”
Markets had yet to react to the AAOIFI statement on most Islamic bonds not being truly Sharia compliant and it could prompt a sell-off, Bakar said.
He added he would like to see the existing Islamic bonds — known as sukuk — continuing as they were but new bonds taking into account the ruling.