With global finance on its knees, business graduates face an even trickier jobs market than most. But there is one area of banking still experiencing boom time — Islamic finance — and universities have been quick to grasp its possibilities.
This September will see new courses and postgraduate qualifications in Islamic finance springing up throughout the UK and elsewhere in Europe, reflecting the fact that it has become one of the fastest-growing sectors of the global banking industry, expanding by between 15% and 20% a year.
Assets held by institutions adhering to Islamic finance principles now amount to nearly $1-trillion. In the UK interest in the sector also reflects the government’s commitment to promoting Britain as an Islamic finance centre.
Last December the UK’s treasury published a paper setting out the government’s aim for London to be “Europe’s gateway to international Islamic finance”. This acknowledged that the industry was still young and therefore not yet experiencing skills shortages, but predicted that it soon would be. It stated: “The pool of potential applicants in the UK will have to keep up with the rapid growth of the market.”
Universities have responded enthusiastically. Newcastle University in northern England is offering an MSc in finance and law with Islamic finance from the next academic year.
Henley Business School at the University of Reading near London has been offering an MSc in investment banking and Islamic finance since last year, with students spending the second part of the year in Kuala Lumpur.
The University of Bangor in Wales has also been running its Islamic finance MA and MSc for a year and is considering introducing a new MBA in the subject, and the first students to take an Islamic finance option as part of an executive MBA offered in Dubai by Cass Business School will graduate this summer.
Student demand is driving the subject as much as any urging from governments. According to Rodney Wilson, founder and director of the Islamic finance program-me at Durham University, it is coming mainly from Southeast Asia, particularly Malaysia, and the Middle East, although there is plenty of interest from the UK as well.
Joanna Gray, a professor of financial regulation at Newcastle Law School, says she is keen that its new course is not just seen as something for Muslims. “It’s for anyone interested in a fast-developing industry that, in the UK, has been quite busy in the past few years to accommodate forms of investment in finance that are sharia-compliant.”
Modern Islamic finance dates from the mid-1970s, with attempts to make products available through conventional banking, such as loans and mortgages, compatible with sharia principles.
Sharia law prohibits any transaction that involves paying interest or investing in certain economic sectors such as gambling or pornography.
It demands that both the investor and recipient of the investment must share any risk and transactions have to be underpinned by tangible assets.
In the years immediately after 9/11, anything involving money and Muslims was viewed with suspicion by many in the West because of fears about terrorism and Islamic finance is taking off faster in the UK and France than in the United States. But in the current global financial climate the principles which it is based have struck a chord. —