Koo Jin Shen
BANDAR SERI BEGAWAN
THE Islamic finance industry needs to offer more than retail based products by expanding its current portfolio into the corporate sector.
“Islamic banking and finance had been a predominantly retail-driven industry,” said Mustafa Adil, head of research and product development for Islamic finance at global intelligence firm Thomson Reuters.
In a recent interview with The Brunei Times, Mustafa said Islamic finance is a relatively-new segment of the banking and finance industry. But over the years, it had gain a lot of traction among consumers, with Islamic banks usually offering retail products.
“It has helped developed financial inclusion in the sense that a lot of consumers had come from outside the banking space into this segment,” he said.
But Mustafa said Islamic finance has barely touched on corporate banking. This is because corporations distinguish less between Islamic and non-Islamic finance than retail customers.
He said most Islamic banks focus on taking deposits and giving financing to consumers. But Mustafa said some funds are now going to the corporate side which help grow small and medium enterprises.
Mustafa said there’s also a need to align Islamic finance with other sectors of the Islamic economy.
He said Islamic finance had came into an established industry where some activities are not syariah-compliant.
“It had been a harder sell for people to accept that something may or may not be syariah-compliant and this other alternative (Islamic finance) should be. But halal food for example was simply standardising existing centuries old practice,” he said.
The Brunei Times
Monday, June 8, 2015