According to international reports published recently, Kuwait is leading the world in the number of Islamic financial institutions and the volume of assets these bodies manage, stressed Minister of Commerce and Industry Falah Al-Hajri Sunday.
The minister inaugurated the eighth international forum of Islamic finance institutions and said Kuwait was among the states quick to support the Islamic financing industry through both legislation and creation of friendly operating atmosphere.
Al-Hajri further remarked leading international banks are now seeking to offer Islamic banking products and services, which is testimony to the growth and importance of the field.
In figures, over 300 Islamic finance bodies are operating in 75 states, managing some USD 500 billion amid expectation the figure would go all the way up to over a trillion by 2015.
On issues to be discussed, Al-Hajri mentioned quality control and Shariaah (Islamic Jurisprudence) compliance, which is the main concern, due to the very nature of these bodies as providers of Shariaah-compliant services.
There is also the issue of sovereign rating, as this rating determines these institutions’ competitive edge as they seek international expansion, Al-Hajri noted. Intellectual property rights would also come up in terms of how it applies to financial products and services.
The two-day conference is a most important venue for Kuwait, as the Islamic finance sector is the state’s most developed and fastest growing sector.
Addressing the forum, participant Ahmad Al-Yaseen said the growth seen in the sector is due to the reliability and quality of the services and products and the full and careful implementation of Shariaah guidelines.
He said Islamic financing offers satisfactory solutions and alternatives to interest rate on transactions.
Kuwait Finance House General Manager Mohammed Sulaiman Al-Omar for his part said, on behalf of the sponsors, that the industry is now before a historical opportunity amid the current developments which create favorable conditions for further growth and development in Islamic financing.
He said that as local opportunities are limited, Islamic financing bodies are seeking international and regional expansion to seize opportunities beyond the local market. This is the lone option the way things are, he stressed.
Representing participants, representative for National Bank of Kuwait Abdullah Al-Tuwaijri said Islamic banking and financing in the Arabian Gulf region benefited from the economic boom in the region and the increase in oil prices.
He pointed out products and services saw marked growth, as sukuk, for instance, went up to USD 27 billion by September 2007 and it is expected the figure would reach 50 billion in 2008.
On the industry in Kuwait, he said the sector is more advanced than in most states, and growth saw the number of companies go from 14 companies three years ago to a current 37 companies.
These bodies are managing sums over KD six billion which is over 40 percent of the overall sums managed by investment companies in Kuwait.
Traditional finance and banking operators are starting to offer Islamic products and services, such as the National Bank of Kuwait, which currently runs more than one Islamic fund.