GLOBAL ISLAMIC FINANCE EDUCATION 2013 · 2015-03-26 · Global Islamic Finance Education 2013 7 Scope Limitations We took every care to ensure data accuracy as humanly as possible

GLOBAL

ISLAMIC FINANCE EDUCATION 2013 Special Report

DISCLAIMER

The contents of the Global Islamic Finance Education 2013 report are based on a combination of quantitative and qualitative

data collected mostly from secondary sources and in some cases from primary sources. Subjective judgments and best

estimations were used where data was not complete or unavailable. Quantitative data were collected from publicly available

sources.

We are not assuring the completeness or accuracy of the information obtained from various published sources. While

sincere care has been taken in collecting, organizing, and presenting the data in this report, Yurizk do not hold responsibility

as to the accuracy or completeness of the data, and their analysis. The scope of this report is limited to publicly available

information and therefore completeness cannot be assured. Due to uncertainty involved with the passage of time, accuracy

at the time of publishing this report is also not guaranteed.

CONTENT OVERVIEW

INTRODUCTION FINDINGS

BONUS SECTION CHALLENGES &

RECOMMENDATIONS

1 2

3 4

o Report Summary

o Definition

o Methodology

o Classification

o Geographic Distribution

o Distribution by Metrics

o Rankings by Number

o Comparative Analysis

o Key Challenges

o Envisioning the Future

o Recommendations

o Intellectual Contributions

by Industry Practitioners,

Thought Leaders, and

Academic Scholars

REPORT SUMMARY

Islamic Finance industry, which has been growing at an unprecedented rate of 15 – 20% per year since last couple of years,

is still at its nascent stage as some say with many challenges ahead, human resources development being one of them.

Since last decade the number of academic and knowledge services providers for Islamic Finance industry have increased

significantly in order to bridge the demand and supply gap and also to tap into the profit opportunity from a burgeoning

economic sector. There has not been any comprehensive analysis of the education sector of this industry as to where it

stands today in terms of knowledge and research based innovation. GIFE 2013 is a ground breaking initiative in that regard

that brings about critical insight to gauge the current status as well as the future outlook, critical challenges facing

the harmonious and long term growth of this flourishing economic sector.

GIFE 2013 is a special and timely report that explores the distribution of Islamic Economics and Finance education across

the world by using several metrics such as the number of Islamic Finance education providers, geographic distribution,

language of instruction, delivery method, type of programs, intellectual vs. skill based programs etc.

According to our research data, we concluded that 85% of the educational initiatives within Islamic Finance industry are

potential contributors towards professional development and only 15% of the initiatives are potential contributors of research

and developments.

Among the key challenges facing Islamic Economics and Finance education are lack of quality human resources,

insufficient quality initiatives in research and development, lack of comprehensive curriculum and international standard

textbooks, and lack of funding. As the Islamic Economic and Finance industry set to become part of the mainstream

economy and financial system urgent strategic steps are necessary to resolve the challenges set forth in this report.

WHAT ARE IFEKSP (ISLAMIC FINANCE EDUCATION & KNOWLEDGE

SERVICES PROVIDERS)?

Global Islamic Finance Education 2013 5

For the purpose of this research, we defined IFEKSP (Islamic Finance Education and Knowledge Services

Providers) as organizations that provide any one or more of the following in the subjects of ‘Islamic Economics’

and/or ‘Islamic Finance’:

Dedicated degree programs ( Bachelors, Masters, PhD)

Courses within a degree program (Electives, Major courses)

Independent short courses (Non-degree)

Diploma (Postgraduate / Higher, Regular)

Certification

Training Courses ( Individual, Corporate )

Seminar, Workshop, Awareness programs

Research (Primarily academic)

METHODOLOGY


Primary Data

Secondary Data

Our research was conducted using both primary and secondary sources. Data were collected as follows:

Organizations that fall under our definition of IFEKSP submitted their

information through web based forms provided by Yurizk.

Approximately 5% of the total data were collected from primary

sources.

Our secondary research was conducted through web based search,

and sourced from institution websites, news and information services,

directories, press releases, and published interviews.

95% of our research data are from this category and all of them are

from publicly available sources.

SCOPE AND LIMITATIONS


Scope Limitations

We took every care to ensure data accuracy as humanly as possible. The following are the scope and limitation of

the report.

The scope of our research is broader than

any other previous researches conducted

on Islamic Finance education.

Our research included both academic and

non-academic institutions.

It covered the entire world and not just any

specific segment or region.

All our data were collected from publicly

available published sources. Any data that is

not available publicly were not included in this

report.

Countries that restrict access of information,

could not be covered to obtain accurate and

comprehensive status. For example, Iran may

have more institutions that offer Islamic

Finance courses, but due to limited access,

only publicly viewable data were included.

This may not give a true picture of the state of

Islamic Finance education in such countries

which may also reflect on the global

distribution.

As new courses are being offered every year,

and recent years experienced significant

boom in IF education, we cannot guarantee

data accuracy and comprehensiveness at

the time of publication of this report.

CLASSIFICATION OF DATASETS


Classified As Explanation of Classified Category

Academic Universities, Colleges, Higher Learning Institutions that offer academic courses

Non-Academic Institutions offering non-academic courses such as training, workshop, seminars, and research that are

academic in nature


Distant Learning Courses that are delivered as self –study, live online modules, recorded web based learning, research

based studies

In-Class Courses and lessons conducted in class at a designated location

For the purpose of our research we classified our datasets as follows:


Intellectual Programs that potentially contribute towards research and innovation. Dedicated degree programs,

PhD, dedicated research fall under this category.

Skill Based Programs and courses that potentially contribute towards professional development and skill building

for the Islamic Financial institutions. Training, workshops, short courses, elective/major courses fall

under this category.

CLASSIFICATION OF DATASETS: TYPE OF PROGRAM AND

COURSE



DDP (Dedicated Degree Program) Bachelors degree, masters degree, PhD, MBA

LTD (Leading to Degree) Elective and major courses under dedicated degree programs

ISC (Independent Short Course) Short courses that are not part of any degree program, non-credit courses

Dp (Diploma) Postgraduate diploma, any higher diploma or regular diploma courses

C Certification: Non degree certification courses offered by public and private, non-

profit and for profit organizations

T Training: individual and corporate training by public and private organizations for skill

building (both non-profit and for profit institutions)

S / A Seminar and awareness programs offered by academic, research and public

institutions

W Workshops conducted by academic, research and financial institutions for skill

building

R Research conducted by academic, non-profit, government, and private

organizations with primary activity listed as research for Islamic Finance

Asia 43%

Europe 22%

Middle East & North Africa

19%

North America 8%

Sub-Saharan Africa 6%

Oceania 2%

DISTRIBUTION OF ISLAMIC FINANCE EDUCATION & KNOWLEDGE

SERVICE PROVIDERS BY WORLD REGION


Asia, home of the largest

Muslim population hosts

43% of global IFEKSP

1

2

3

4 5 6

742 IFEKSP

DISTRIBUTION OF ISLAMIC FINANCE EDUCATION & KNOWLEDGE

SERVICE PROVIDERS BY COUNTRY


Afghanistan 3 India 28 Philippines 5

Algeria 1 Indonesia 31 Qatar 4

Australia 16 Iran 2 Russia 6

Azerbaijan 1 Iraq 1 Saudi Arabia 19

Bahrain 20 Ireland 8 Seychelles 1

Bangladesh 22 Italy 5 Singapore 15

Belgium 2 Japan 4 South Africa 8

Bosnia & Herzegovina 3 Jordan 6 Spain 5

Brunei 4 Kazakhstan 1 Sri Lanka 8

Cambodia 1 Kenya 6 Sudan 5

Canada 15 Kuwait 7 Sweden 3

China 1 Lebanon 9 Switzerland 6

Cyprus 1 Libya 3 Taiwan 2

Denmark 3 Luxembourg 5 Tanzania 3

Egypt 9 Malaysia 86 The Netherlands 2

Finland 1 Maldives 3 Tunisia 4

France 12 Mauritius 6 Turkey 12

Gambia 2 Morocco 3 Uganda 1

Germany 7 Nepal 1 United Arab Emirates 43

Ghana 2 Nigeria 11 United Kingdom 86

Hong Kong 8 Oman 7 United States 44

Hungary 2 Pakistan 88 Yemen 3

TOP 10 COUNTRIES BY NUMBER OF ISLAMIC FINANCE

EDUCATION AND KNOWLEDGE SERVICES PROVIDERS


Pakistan tops the chart with 88 institutions

that offer education and knowledge services

in Islamic Finance in the country. 74 of these

are academic and 14 are non-academic

Institutions.

Malaysia and United Kingdom come second

with 86 institutions offering Islamic Finance

education and knowledge services.

United States and United Arab Emirates take

fourth and fifth position with 44 and 43

institutions respectively. In case of

United States 41 are universities and higher

learning institutions.

Pakistan

Malaysia

United Kingdom

United States

United Arab Emirates

Indonesia

India

Bangladesh

Bahrain

Saudi Arabia

88

86

86

44

43

31

28

22

20

19

DISTRIBUTION OF ACADEMIC VS. NON ACADEMIC

INSTITUTIONS IN TOP 10 COUNTRIES


Academic & Higher Learning

(Universities & Colleges)

Non – Academic

(Training, Awareness and Other)

74

49

48

41

28

24

14

13

11

7

Pakistan

United Kingdom

Malaysia

United States


Indonesia

India

Bangladesh

Saudi Arabia

Bahrain

38

37

15

14

14

13

9

8

7

3

Malaysia

United Kingdom


Pakistan

India

Bahrain

Bangladesh

Saudi Arabia

Indonesia

United States

DISTRIBUTION BY TYPE OF INSTITUTION:

ACADEMIC VS. NON-ACADEMIC


61% 39%

Academic Non-Academic

61% of the Global Islamic Finance Education and

Knowledge Services Providers are Universities

and Higher Learning Institutions

Institution Type Number

Academic 456

Non-Academic 286

TYPE OF INSTITUTIONS: PUBLIC VS. PRIVATE

ACADEMIC INSTITUTIONS


47% 49%

4%

Public Private Other

There are more Private institutions than

Public institutions in Islamic Finance

Education Sector

Data 2012

DISTRIBUTION BY INSTRUCTION LANGUAGE


0

100

200

300

400

500

600

700

800

English BahasaIndonesian

BahasaMalaysia

Turkish Arabic French Other

95%

1.5% 0.8% 0.8% 0.5% 0.5% 0.8%

Other Languages

of Instructions

German

Italian

Spanish

Russian

Urdu

Bengali

95% of the

institutions deliver

their Islamic Finance

programs in English

DISTANT LEARNING VS. TRADITIONAL IN CLASS LEARNING:

TRENDS AND OPPORTUNITIES


10%

90%

Distant Learning Classroom Learning

5

7 8

10

14

18

0

5

10

15

20

2008 2009 2010 2011 2012 2013(1Q)

eLearning programs are on the rise since

last 5 years. This can significantly address

the challenge of human capital

development globally

DISTRIBUTION BY LEVEL OF PROGRAM


361

214

124

47

30 30 20

ProfessionalDevelopment

Masters Bachelors Awareness PhD Research MBA

Professional Development:

programs under this category

are certifications, training,

independent short courses,

professional development

seminars, diploma, higher

diploma, tailored workshops.

Both academic and non-academic institutions are

primarily focused on skill building or professional

development to fill in the demand gap.

INTELLECTUAL VS. SKILL BASED PROGRAMS


15%

85%

Intellectual Skill Based

Intellectual

(PhD, Dedicated Degree

Programs, Research)

Skill Based

(Certifications, Workshops,

Training, Diploma, Seminars

Short Courses etc.)

How will research

and development

be facilitated for

future growth &

sustainability?

DISTRIBUTION OF ISLAMIC FINANCE EDUCATION AND

KNOWLEDGE SERVICES PROVIDERS IN ASIA


Asia has 318 institutions that offer Islamic Finance

education and knowledge services

Country Number Country Number

Afghanistan 3 Kazakhstan 1

Azerbaijan 1 Malaysia 86

Bangladesh 22 Maldives 3

Brunei 4 Nepal 1

Cambodia 1 Pakistan 88

China 1 Philippines 5

Hong Kong 8 Russia 6

India 28 Singapore 15

Indonesia 31 Sri Lanka 8

Japan 4 Taiwan 2

Source: Yurizk Research Database (August 2013)

1

2

3

4

5

Driving Forces

Rising Popularity

Emerging Markets

Pakistan Malaysia

India Indonesia

Bangladesh Singapore

Hong Kong

Sri Lanka Philippines

Russia

RECENT GROWTH TREND OF IFEKSP IN ASIA


1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014Increasing number of new IFEKSP entered in the

Asian market since 2010. 2012, 2013 saw rapid

growth in the number of new IFEKSP in Asia

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Malaysia Asia

A CLOSER LOOK AT IFEKSP IN ASIA


Out of the total 318, 199 are

academic, and 119 are non-

academic institutions.

87% courses and programs

contribute towards professional

development 63%

37%

Academic

Non-Academic

13 12 5

33 20

34

33

8

33

40

79

12

Bachelors Masters PhD Research ProfessionalDevelopment

Research

Training, Seminar, Workshops, Short Courses

Certifications

Diploma

MBA

Elective Course

Major Course

Degree

87%

13%

Professional Development Research and Innovation

DISTRIBUTION OF IFEKSP IN EUROPE


“United Kingdom leads Islamic

Finance Education Services in

Europe with 53% of the total

IFEKSP in the region”

Country Institutions

Belgium 2

Bosnia & Herzegovina 3

Cyprus 1

Denmark 3

Finland 1

France 12

Germany 7

Hungary 2

Ireland 8

Italy 5

Luxembourg 5

Spain 5

Sweden 3

Switzerland 6

The Netherlands 2

Turkey 12

United Kingdom 86 1

2

2

RECENT GROWTH TREND IN LAUNCH OF NEW IFEKSP IN

EUROPE


0

5

10

15

20

25

30

2004 2006 2007 2008 2009 2010 2011 2012

2009 and 2012

experienced a booming

period for Islamic

Finance education in

Europe with launch of

many new programs

and courses

Emerging Markets

France Turkey

DRIVERS OF RECENT GROWTH IN EUROPE


Source: The Times Source: The Journal of Turkish Weekly

A CLOSER LOOK AT IFEKSP IN EUROPE


77% of the courses and programs

are contributing towards professional

development, 23% towards R&I

Academic 61%

Non-Academic

39%

29

1 3

39

5 12

18

89

13


Research

Training, Seminar, Workshop, Short Course

Certifications

Diploma

Elective / Major

Degree

Professional Development

77%

Research and Innovation

23%

DISTRIBUTION OF IFEKSP IN THE MIDDLE EAST AND

NORTH AFRICA


Algeria 1

Bahrain 20

Egypt 9

Iran 2

Iraq 1

Jordan 6

Kuwait 7

Lebanon 9

Libya 3

Morocco 3

Oman 7

Qatar 4

Saudi Arabia 19

Tunisia 4

United Arab Emirates 43

Yemen 3

1

2

3

United Arab Emirates leads in MENA with

43 institutions which is 30% of the total

IFEKSP in the region

A CLOSER LOOK AT IFEKSP IN THE MIDDLE EAST AND

NORTH AFRICA


Academic 52%

Non-Academic

48% Professional Development

82%

Research & Innovation

18%

4 13

2

26

19

1

15

30

45

11


Research

Training, Seminar, Workshop, Short Course

Certification

Diploma

Elective / Major

Degree

82% courses and

programs are contributing

towards professional

development and 18%

towards research &

innovation

DISTRIBUTION OF IFEKSP IN NORTH AMERICA, SUB-SAHARAN

AFRICA, AND OCEANIA


United States 44

Canada 15

Gambia 2

Ghana 2

Kenya 6

Mauritius 6

Nigeria 11

Seychelles 1

South Africa 8

Sudan 5

Tanzania 3

Uganda 1

Australia 16

2000

2002

2004

2006

2008

2010

2012

2014

Research & Innovation

26%

Professional Development

74%

DISTRIBUTION OF IFEKSP IN OIC, OECD, AND BRICS

COUNTRIES


43

226

399

BRICS OECD OIC

BRICS 6%

OECD 34%

OIC 60%

80%

56% 53%

BRICS OECD OIC

Percentages of member countries

hosting IFEKSP

Distribution by number of IFEKSP

Percentage distribution by

total number of IFEKSP

Although 60% of the total

IFEKSP belong to OIC,

only 53% of the member

countries host IFEKSP

RECENT GROWTH TREND AND FUTURE PROJECTION


0

100

200

300

400

500

600

700

800 By 2016, total number of IFEKSP

worldwide may surpass 1250

RECENT TREND IN DEMAND BY PROGRAM TYPES


Sample Size

2,910

Demographics (Region)

Asia, Europe, Africa, Americas,

Oceania, Middle East Source: Yurizk Poll, Yurizk Web Queries (2012 – 2013)

Detail available in Full Report

CHALLENGES FACING ISLAMIC FINANCE EDUCATION


Human Capital

Research &

Innovation

Curriculum &

Textbooks

Funding

Insufficient quality human resource is claimed as

critical challenge for Islamic Finance industry although

85% of the educational initiatives are towards

professional development. Where is the gap?

Only 15% of the global IF

educational initiatives are potential

contributors of R&D. What should be

the way forward?

Who will design a comprehensive

curriculum that addresses all the

challenges to produce next

generation human capital?

How will the initiatives be funded?

Will there be conflict of interests?

DEVELOPING NEXT GENERATION HUMAN CAPITAL


SHARIAH SCHOLARS

ACADEMICIANS

RESEARCH SCHOLARS

SKILLED EMPLOYEES

1

2

3

4

How do we visualize the next

generation Shariah Scholars?

How do we visualize the next

generation Academicians?

What will be the role of next

generation Research Scholars?

What will be expected from next

generation skilled employees?



Shariah Scholars 1

Qualification Standards?

Current initiatives?

Could this be the Vision?

Arabic

Islamic Shariah (Theology, Shariah, Maqasid Al

Shariah, Usul Al Fiqh, Fiqh, Fiqh al Muamalaat, Islamic History, Hadith

Sciences etc.)

Economics

(Conventional + Islamic

Perspectives)

Finance & Banking

(Conventional + Islamic)

Shariah Scholar

1 2

3 4

Mastery in all 4 areas



Academicians 2




Arabic



Sciences etc.)

Economics


Perspectives)

Finance & Banking


Shariah Scholar

1 2

3 4




Research Scholars

3




Arabic



Sciences etc.)

Economics


Perspectives)

Finance & Banking


Shariah Scholar

1 2

3 4


RECOMMENDATIONS


Long term, strategic and visionary approach

for human capital development

Collaborating resources is the way forward

Clarity and unity in the objectives of research

Building cutting edge infrastructures to

facilitate research & development

Utilization of modern technologies to

accelerate the process

Attracting global talents with efficient

marketing

BONUS SECTION


Industry Thought Leaders, Practitioners, Academic Scholars shared their

views on various issues of Islamic Finance Education

WHY ISLAMIC FINANCE TRAINING NEEDS TO CONFORM

TO AAOIFI STANDARDS


Ethica Institute of Islamic Finance

Without standardized training and certification, the Islamic finance

industry will continue to calcify in its old ways: no serious innovation

into equity-based Musharakah and Mudarabah products; no practical

alternative to a fractional debt-reserve banking system; no global

gold-based currency; and no move away from debt-based mainstays.

Instead, what we need in order to rebuild Islamic finance is a strong

foundation of capable, trained individuals competent enough to

innovate products away from debt-based, fiat-based, cosmetically-

enhanced conventional products for the rich and upper middle class to

equity-based, asset-based, genuine products for all.

Yet, we continue to sing the praises of Islamic bankers at awards

ceremonies, hymn the “growth” mantra of conventional economics,

and hope for the best. Somehow, someone, we believe, will one day

make it all right. After all, Islamic finance is just starting out and it

only needs a little more time to work out the details, no?

Wrong. Where we are presently headed is an unabashed embrace of

conventional banking served up with a milquetoast nod to the Shariah.

If we go on without standardized training, nothing changes and we

continue as before. We lend further credence to detractors who

believe that Islamic finance is not working and what is needed is a

complete revamp.

But because these same detractors leave much to be desired in the

way of a practical, scholar-approved blueprint for us to follow, what

the absence of a workable alternative will more likely lead to is

countless millions with a worse option (interest-based products) rather

than a merely bad one (poorly implemented Islamic finance).

What we need is a move away from the current state of “anything

goes” Islamic finance training and certification. What we need is

standardized training and certification based on AAOIFI Shariah

Standards. AAOIFI, (pronounced “a-yo-fee”), is the Accounting and

Auditing Organization for Islamic Financial Institutions and the de

facto in over 90% of the world’s Islamic finance jurisdictions.

AAOIFI already brings together scholars from all over the world who

agree on Shariah standards and have put behind us the painstaking

task of harmonizing global standards.

According to the Institute of Management Accountants, AAOIFI

standards are now mandatory in Bahrain, the Dubai International

Financial Centre, Jordan, Qatar, Qatar Financial Centre, Sudan, South

Africa, Syria, and the Islamic Development Bank. AAOIFI standards

also form the basis for national standards in Bangladesh, Brunei,

France, Indonesia, Kuwait, Lebanon, Malaysia, Pakistan, Russian and

Central States, Saudi Arabia, the United Arab Emirates, and the

United Kingdom.


AAOIFI’s regularly updated texts have become the definitive

reference work for those seeking a comprehensive rule book about

Islamic financial products and practices. Its 85 standards cover

everything from accounting and auditing to governance and product-

specific Shariah standards. The 16 to 20 scholars – the number

depending on the year – who sit on AAOIFI’s Shariah Board are

leading Islamic finance scholars who come from the Gulf, South Asia,

South East Asia, Africa, and North America; each of them legally

qualified to issue a fatwa and adjudicate on matters Islamic finance.

If we are going to be serious about Islamic finance, we need to be

serious about Islamic finance training. And being serious about

training means being careful about what is being said. A scholar once

advised his student, “Find the best teacher and become the best

student.” The best “teacher” the Islamic finance industry presently has

is AAOIFI. Are we as “students” equal to the task?

© Ethica 2013-18 |

Winner of "Best Islamic Finance Qualification" at the Global

Islamic Finance Awards, Ethica (www.EthicaInstitute.com) is

trusted by more professionals for Islamic finance certification.

Training and certifying professionals in over 100 financial

institutions in 56 countries, Ethica's 4-month Certified Islamic

Finance Executive™ (CIFE™) is a globally recognized certificate

accredited by scholars to fully comply with AAOIFI, the world's

leading Islamic finance standard. Ethica's award-winning CIFE™

is delivered 100% online or live at the bank. The Dubai-based

institute is now supported by Licensed Ethica Resellers in 11

countries. For more information about this article, or to schedule an

interview with Ethica Institute of Islamic Finance, please call +971-

4-455-8690 or e-mail at [email protected].

“What we need is a move away from the current state of “anything goes”

Islamic finance training and certification. What we need is standardized

training and certification based on AAOIFI Shariah Standards.”

www.ethicainstitute.com

CHALLENGES AND RESOLVES FOR ISLAMIC FINANCE

EDUCATION: A PRACTITIONER’S PERSPECTIVE


Muhammed Ikram Thowfeek, President, First Global Academy

Till today, since 2008, given the global financial crisis after crisis,

millions of people all over the world are suffering directly and/or

indirectly, whilst looking for alternatives to the conventional modes

of banking, financing and investments that can portray ethics and

fair dealings. These millions of people who are looking for an

alternative system of banking and finance are yet to explore the

benefits, opportunities and the growth potentials of the Islamic

banking and finance industry.

Unlike the conventional banking and finance that looks at any

financing and/or investment activity mostly from an economic and

financial benefits, whereas Islamic Finance (IF) goes beyond

economic and financial benefits, and looks at moral, ethical, social,

and religious aspects of it, which are unique propositions that can

provide solutions to millions of people (both Muslim and non-

Muslims) all over the world through equity participation, risk

sharing & fair dealing.

The challenging question to ask is that, “if the ‘IF’ industry can

provide solutions to those individuals, corporate entities and the

governments at large that are affected directly and/or indirectly by

the global financial crisis after crisis? Then, what is stopping the

industry of becoming the main stream banking & finance system

appealing to the global market to serve both the Muslims as well as

the non-Muslims? Is it ‘Awareness’, ‘Education’ and/or the

‘Islamic Finance Institutions (IFIs)’ within the industry are the

bottlenecks to sustain the growth of the IF industry and become the

main stream global finance system.

The simple answer to this challenging question is, bring

“Awareness” globally, from laymen to intellectuals, coupled with

“Education” from 16+ years to the PhDs. All those who are ‘Aware’

and also equipped with education on the subject matter will

definitely can make a ‘difference’ in the public domain and more

specifically at the institution level too, to raise the standards in every

facets of the organization to compete and to go beyond their

conventional counterparts, whilst sustaining the growth of the ‘IF’

industry and making it appealing to the global market.

Let’s look at “Awareness” - what are the challenges and resolves

available to take this message of ‘IF’ globally to the laymen as well

as the intellectuals and to those in between, so that everyone

benefits.

Three decades plus, from the birth of the modern experiments with

IF in 1975, till to date, only 20% of the market opportunities and

growth potentials of ‘IF’ industry is tapped. It’s, just like the tip of

the iceberg, 80% is largely untapped mainly due to lack of

understanding and awareness as to “what Islamic Finance is all

about”?

“…only 20% of the market opportunities and growth potentials of IF industry is

tapped, just like the tip of the iceberg, and 80% is largely untapped mainly due

to lack of understanding and awareness as to “what Islamic finance is all

about?”


In most of the countries where there is an Islamic bank, two or more,

the target market is confined to the Muslim community only? As if

‘IF’ is only confined to the Muslims and not for the non-Muslims,

who are indeed looking for alternatives to the conventional modes of

banking & finance.

Why this focus? Again due to lack of understanding, awareness and

education on the subject of ‘IF’ and its enormous benefits that could

accrue to all mankind, irrespective of what color, sects, race, religion

or ethnic group they belongs to.

The primary challenge of some of the existing Islamic Financial

Institutions (IFIs) is not attracting new Muslim customers to the

Islamic finance fold, but how to retain those who are already

patronizing, while some of those although not satisfied with the

level of services and offerings compared with that of their

conventional counterparts but still stay put, with all the bickering,

mainly due to the Shari’ah layer or comfort. However, majority of

them move back to conventional banking or to any new IFI that has

open doors, seeking better customer services, wide range of product

offerings coupled with excellent distribution channels – the pricing

and returns become secondary and then comes Shari’ah compliance

for them.

Today, the mandates of bringing awareness to the masses is

confined to those Islamic Finance Infrastructure Institutions (IFIIs)

like, IFSB, AAOIFI, CIBAFI, IIFM, IRTI, IIRA, etc., through their

annual forums, conferences and symposiums held once or twice a

year. This has to change from annual events to a day to day affair

bringing awareness to the general public is onus on all the

stakeholders of the Islamic finance industry, mainly the institutional

players, practitioners, Shari’ah scholars etc., who should have

planned awareness and educational events to reach out to the public

every nook and corner of the country through various channels –

news media, TV, satellites, social media, Q&A forums, live, online,

virtual chats etc.

This needs a budget allocation by all the IFIs for planned events

mainly to bring public awareness and educating the masses (not only

the Muslim community but the entire humanity at large), which will

definitely add value to the bottom lines of the IFIs.

More the general public, from all walks of life, understand what the

‘IF’ is all about and experiences proper conduct of IFIs, not only the

Muslims are going to rally around and patronize IFIs the non-

Muslims too will join the bandwagon not mainly due to Shari’ah

compliance but due to excellent customer services and the ethical

values portrayed in every transaction and activity undertaken by the

IFIs.


That’s on ‘Awareness’, let’s come back to the ‘Educational

Programs’ in building professionals in the field of Islamic Finance

who could take this industry to yet another paradigm given the

appetite and the global attractions to the Industry aftermath of the

global financial crisis after crisis.

With all due respect, most of the educational institutions that are

offering a certificate, diploma, a degree or a PhD level program in

Islamic finance drumbeats that they are sharing practice (not theory)

with students and making them ready to take up positions in the

Islamic banking and finance industry.

The other day, a dear friend of mine, asked me a question, soliciting

my views as a seasoned professional in the Islamic Finance (IF)

industry, trying to see what I thought the prospects were for those

young people looking to enter the Islamic Finance industry and

'make a difference'.

He said, “The story these young graduates keep telling me is that

there are simply no jobs on offer – which seems to be at odds with

the headlines that we keep seeing proclaiming that the ‘IF’ industry

is 'growing at 20% per year.”

My response was “Those seeking greener pastures or opportunities

in the IF industry are unfortunately knocking at the wrong doors or

are ill equipped - the regional and global markets are opening up for

Islamic finance – so be ready”.

Further, I mentioned that, “being in the IF industry over the last two

decades, I strongly believe that the bigger the global financial crisis

is the greater the opportunities are to all the stakeholders in the

Islamic finance industry, which can provide solutions to millions of

people (both Muslims and non-Muslims) all over the world to

improve their lives, financial and investment choices - through

equity participation, risk sharing and fair dealings.”

To get these graduates and students who are looking for a career and

to fill one of those million jobs needed up to 2020, as per the

researchers, need to pursue on programs that really make them

professionally qualified as an iBanker (Islamic Banker) whilst

retaining their specialization or their field of choice namely, ICT,

human resources, Shari’ah, product development, sales, marketing,

legal, financing, accounting, management etc.

Keeping in mind, these current demands for professional Islamic

Bankers who can ‘raise the bar’ of the IFIs, in particular, and the IF

industry, in general, the First Global Academy (FGA) have rolled

out the iBanker Certificate, Diploma and Executive Diploma

programs to the global market (both in campus and online), for those

who would like to enter at different levels from 16+ years onwards.

Becoming an iBanker, in a chosen field, by following these FGA

programs not only groom students to take up any entry level or a

higher position in any IFI but also makes them to look at ‘banking &

finance’ from yet another perspective. That is, as ‘Entrepreneurs’.

“Islamic bankers are not mere bankers from a conventional sense,

where accepting deposits and lending are the core competencies of

conventional bankers to have the maximum spread between the two.

Whereas the Islamic bankers and finance specialists focus on

profit/loss sharing by using the funds on economic generating

investing and trading activities to make a profit and share that profit

with all the depositors and shareholders, whilst protecting the fabric

of our society without engaging in activities prohibited and harmful

to the society”.


With the mindset of grooming an iBanker to be an iEntrepreneur

(Islamic Entrepreneur) too, we will be sharing only Practice,

Practice & Practice of Islamic finance and our lecturers panel are

geared up to do so and equipped with practical knowledge and

exposure in setting up IFIs in the Middle East (ME) region from

scratch. They know and very well aware what’s happening in the

kitchen of those institutions and the expectations of the customers.

Indeed, there is a wide gap persist between the expectations of the

customers and the reality; we have to narrow down this gap to reach

out to as many people as we can with Islamic finance offerings

bringing benefits to all (both Muslims and non-Muslims alike) “to

improve their lives, financial and investment choices - through

equity participation, risk sharing and fair dealings.”

“I strongly believe that bigger the

global financial crisis is the greater

the opportunities are to all the

stakeholders in the IF industry,

which can provide solutions to

millions of people (both Muslims

and non-Muslims) all over the

world to improve their lives,

financial and investment choices –

through equity participation, risk

sharing and fair dealings”

Muhammed Ikram Thowfeek (MIT) is currently the Founder of

First Global Group and Group CFO of QAF Holdings Group. He is

a Chartered Accountant by profession and an Islamic Banker by

practice. To date, he has gained a wealth of knowledge and

experience in auditing, management consultancy, financial control,

strategic planning & budgeting, Islamic banking & finance, retail,

commercial and investment banking, Islamic capital and global

Sukuk (Islamic Bonds) market, training and career development

etc., through his diverse positions held in various organizations

(Ernst & Young, Kuwait Finance House, First Islamic Investment

Bank, International Islamic Financial Market, Commercial Bank of

Qatar, Barwa Bank, QAF Holdings Group, First Global Group).

Mr. Thowfeek is a startup specialist and has set up number of

Islamic Banks (IBs) and Islamic Financial Institutions (IFIs) in the

ME region, both fully fledged Islamic Banks and independent IB

branches of conventional banks, from scratch.

He is an Associate Member of the Institute of Chartered

Accountants (ACA) of Sri Lanka, a Fellow of the Chartered Institute

of Management Accountants (FCMA), Chartered Global

Management Accountant (CGMA) of the UK, a Member of the

Institute of Financial Consultants (MIFC) of the USA, a Member of

the Chartered Institute of Securities and Investments (MCSI) of the

UK and a Certified Islamic Banker.

PHILOSOPHY OF EDUCATION IN ISLAMIC FINANCE


Professor Dr. Syed Othman Alhabshi, Chief Academic Officer, INCEIF

The best practice especially in the banking industry is to recruit

staff from various backgrounds. There are occasions where the staff

is not from the disciplines related to economics and finance. They

can be engineers, medical doctors, quantity surveyors, lawyers, etc.

The main reason is that most of the tasks involved in banking can be

easily learnt by those from different background. I know a

statistician who was given a chance to work in an Islamic bank.

Eventually he became one of the most efficient senior staff of the

bank. We also know of engineers and lawyers who do extremely

well in the banking industry. Learning from such experience, it

would be a proper practice for students of Islamic finance to come

from various academic backgrounds. This will certainly enrich the

discussions in class because the body of students would have

differing views from various perspectives, skewed to their

background.

I for one strongly believed that the students would do extremely well

if the professor shows tremendous patience in nurturing them inside

and outside classroom. I read of a story of a sociology professor who

wanted to know whether the young children of about 10 years old,

in a particular slum area in US would make it in life or not. He sent

two hundred of his MBA students to the slum area and selected two

hundred children to find out if they would make it in life. Based on

the environment, the way they dressed, the materials they wear, etc.

the two hundred MBA students had only one answer. They all

agreed that these children will never make it in life

Twenty-five years later, another sociology professor who happened

to read the report sent two hundred of his Masters students to the

same slum area to find out from the same two hundred children who

were the subject of that study twenty-five years earlier. They found

that out of two hundred children, only one hundred eighty three

were around. The other seventeen have either moved out of the area

or have passed away. The Masters students found that all the one

hundred and eighty-seven children who are now about 35 years old

have actually succeeded in life. Some are engineers, others are

lawyers, doctors, teachers, corporate executives, etc. They then

asked how come they were so successful. The answer was, “there

was a teacher”. The two hundred Masters students asked around to

find the teacher who happened to be an old lady of about seventy

years old. When she was asked how come those children who were

considered to have no chance to make it in life have now achieved

tremendous success, she answered with a broad smile on her face, “I

LOVE THEM ALL”.

I strongly believe that the approach to be adopted in nurturing

students whoever they are is to show them the respect, the

confidence we have in them, the dedication and commitment we

give them to really make them successful in life. It is not just the

quality of students that we have but more importantly what our real

intention is when teaching them.


Having a very comprehensive programme with high quality

curriculum and content is very essential to produce the talents we

need in any field. Of course we also need quality students with the

positive attitude to learn. Above all, we need the right approach to

coach, train and educate the students in the most effective way.

One of the major challenges in producing the right type of talent in

Islamic finance is to provide them with the right input so that they

would be able to manage and handle all situations that they face in

the industry. This is a major challenge because Islamic finance as a

subject or discipline of study is still very new. We do not have

standard texts for all the subjects that we teach. Most of the time, we

use texts that are not complete and hence have either to use many

texts or to be added with our own materials. This poses a problem of

standardization or harmonization, especially with regards to Shariah,

principles or concepts and products. We know that there are

conflicting views on Shariah matters between jurisdictions. Hence

we do get products that are acceptable in one market but rejected in

other markets. Even these differences are not considered as major

issues. This is because those conflicting views can be explained and

such conflicts do get mitigated.

There is yet a bigger challenge where some scholars simply feel that

the current practice of Islamic banking and finance are not Shariah

compliant because the beneficiaries do not include the poor and the

have-nots. They prefer to take the view that the benefits of Islamic

banks today which directly benefit the rich and the bankable only

have ignored one of the objectives of Maqasid Shariah that is meant

to bring about benefits to all and sundry and not confined only to the

rich and bankable.

Such a view simply denies the benefits that Islamic finance as

practiced today has brought about to society. Those who adopted

this view do not have the alternative system that could resolve the

problem of those poor and not bankable. The challenge then is how

to ensure that there is financial inclusion. One possible answer is

Islamic microfinance.

Although Islamic finance is growing at a faster rate than

conventional finance, which under present circumstances is

unstoppable, the biggest challenge is acute shortage of human

talents who have very high technical knowledge and at the same

time have excellent Shariah knowledge. We have also observed

many qualifications in Islamic finance that have been introduced to

the market that do not provide the right level, quality and scope of

the subject. We need to find ways of attracting students to the right

programmes so that the objective of bringing Islamic finance to the

next level can be effectively achieved.

Professor Dr. Syed Othman Alhabshi is the Chief Academic Officer

at INCEIF. Since November 1969, Prof Syed Othman has served in

various academic capacities in five leading universities in the

country. He has also served in various capacities on the boards of a

number of organizations including takaful and investment

companies in Malaysia and Pakistan. He has written and published

more than 200 articles and books.

“..the biggest challenge is acute shortage of human talents who have very high

technical knowledge and at the same time have excellent Shariah knowledge”

ISLAMIC MICROFINANCE EDUCATION: THE CRITICAL NEED,

OPPORTUNITY & WAY FORWARD


Islamic Microfinance means micro financing through interest free

modes to the financially deprived and poor people to generate

economic activities and making them self employed for the ultimate

economic prosperity. As per the latest research of Centre of

Excellence in Islamic Microfinance of AlHuda CIBE, the global

Islamic Microfinance volume has reached at US $1 billion with

persistent growth and serving about 1.3 million beneficiaries but the

share of Islamic Microfinance by less than 1% of overall volume of

Islamic Finance (US $1.3 trillion), unveils its misfortune. As per the

expert view it is stated that the Islamic Microfinance education is the

ultimate way to make Islamic Microfinance practicing and let the

people aware of the Islamic Microfinance on global canvas for its

acceptability. The main hindrance to the Islamic microfinance

behind successful execution is instant acceptability caused by lack

of awareness. The concept of Islamic microfinance is recently

developed dimension for micro financing to operate on Islamic

modes and started in early 1960 from Latin America and South East

Asia but Bangladesh has significant contribution to originate and

approach the concept of Islamic Micro financing. The Islamic micro

financing is being done through different models such as: Gramin

Model, Credit Union and Self Help Group in particulars but the

microfinance sector is looking forward a compatible brain well

trained and equipped to practice Islamic Microfinance using these

models prudently. It is observed there are no specialized institutions

for the education of Islamic Microfinance in particular.

Absence of specialized education in Islamic Microfinance,

particularly, is the crucial fact in Islamic Microfinance Industry,

which is one of the hurdles for the promotion of the industry as well.

There is an immediate need to initiate comprehensive degree

programs on Islamic Microfinance globally. If we look into the main

challenges of Islamic microfinance, the lack of awareness and

education fall on the top. Islamic Microfinance Industry is facing lot

of criticism in different aspects e.g. acceptability of Islamic Finance

because of lack of awareness, education and religious consciousness

are the main challenges to Islamic Microfinance Industry.

The expensive education of Islamic microfinance is also a

discouraging factor for the Islamic Microfinance learners which

should be subsidized and funded by Donor agencies e.g. IFC, World

Bank and IDB etc. The 46% of whole world poverty exists in

Muslim World while Muslim population in the world is 26%, so

Islamic Microfinance can potentially be used for poverty alleviation

by social awareness programs through proper channels and

educationists of Islamic Micro Finance realizing its importance and

optimal results.

Muhammad Zubair Mughal is the Chief Executive Officer of

AlHuda Centre of Islamic Banking and Economics (CIBE). He has

been working consistently for last nine years for poverty alleviation

through Islamic Microfinance concept; he can be reached at

[email protected]

Muhammad Zubair Mughal, Chief Executive Officer, AlHuda CIBE

TALENT DEVELOPMENT IN THE ISLAMIC FINANCE INDUSTRY:

NEEDED OR NOT?


More and more educational institutions, around the world, are

offering degree programs and diplomas in Islamic Finance and

banking. This is a good sign as it indicates that the growing global

Islamic finance industry has a rising demand for competent and

trained talent.

Given that the industry is in growth mode why can’t those

undertaking industry qualifications get jobs?

“57,000 new Islamic Finance jobs? How not to get one!” This was

a headline from a leading online news provider about eight months

ago.

Whilst industry news reports spout various numbers, by countries, of

the qualified talent requirement, the scenario on ground belies the

fact that the industry organizations are doing anything concrete

towards talent development. Studying the industry shows two clear

trends:

1. Most Islamic finance operations started as windows. The

conventional products were ‘wrapped’ in an Islamic cover and

offered out. Inadvertently such a practice impacted the talent

recruitment practice of an organization wherein the preference

was for regular conventional finance qualifications.

2. Factor in the lack of industry and academia collaboration

resulting in slow development of professional standards and the

required practical educational content.

These two trends, amidst the backdrop of the global financial crises

that forced organizations to make do with available talent resources,

gives us the background of where talent development in the Islamic

finance industry is at presently.

Whilst respective international financial centers are attempting

certain actions towards a formal talent development policy, on its

own initiative, the global industry is yet to take up this issue as a

critical one.

Talent is the most crucial element in the success of an organization.

Recruiting, engaging and managing the talent, career planning and

developing the talent to be an organizational leader, all of these

ensure sustainable growth and success of an organization. For the

Islamic finance industry lining up the ducks that result in excellent

talent will only be beneficial in all ways.

A key first step is to define what talent is. A common definition,

across the industry, would help in establishing parameters that

would aid in developing a talent development policy, at an industry

level, and aid in developing their independent talent management

strategy.

Some key parameters to put in place would be:

i. Clear set of competencies and a grid to score on, identifying areas

of development.

ii. Identifying talent based on these competencies.

Joy Abdullah, Head of Marketing & Communication, INCEIF


iii. Ensure the organization has an environment that speaks to

personal growth – people must not only want to get better but must

be allowed to, as well.

iv. Lastly ensure identified talent has progressively meaningful

work and gaining influence. These are two critical success factors

for talented staff in terms of retention and productivity.

The second step would be the route of collaborations between

industry organizations and academia and actively investing in the

collaboration to obtain the desired quality talent. As talent is a

primary requirement of the organizations in keeping their business

running, the lead on this has to come from the organizations

themselves. The way forward could be to collaborate with the

academic institutions’ for research requirements that the

organizations need to grow their business.

Thirdly, use the output of the research to develop case studies that

can then become part of academic programme content in order to

provide a more experiential knowledge base for incoming talents.

Lastly, a globally accepted set of competency standards needs to be

in place as the guideposts to what is expected from the talents in

terms of educational qualifications.

There are dual benefits of having in place an industry focused talent

development policy.

I. Locally the organizations would be seeding in the

competencies they seek in a talent, through the collaborations

with academia.

II. The talent gains both knowledge and competencies that the

industry organizations require to keep their business growing.

At a country level, this would act as a stimulus for the financial

services and the education sector. As the collaborations are actioned,

the talents recruited directly by the organizations will create a

“word-of-mouth’ scenario through social media by talking about

their jobs. This in turn will lead to potential talents looking at the

industry and evaluating career benefits. From there it’s a short step

to obtain required qualifications. So the academic institutions start

benefiting as demand for their programme rises. Net result the

industry gains by having a continuous pool of planned for talent that

has the competencies the industry wants.

At an international level centralized collaborations, between industry

bodies in different financial centers, will bring together

organizations and academia to work on enhancing specific areas of

the existing academic content. This, in turn, will facilitate generation

of cross-border academic content. Which benefits talents all round

by providing them the cross-jurisdiction knowledge they need.

For a talent this provides a huge benefit as he or she becomes a “true

knowledge worker” and is able to value-add to an organization

irrespective of the geographical market.

A common grouse of the industry CEOs is on the issue of ‘how can

the sharia specialists understand the bottom-line business pressures

and how can the commercial specialists understand there are strict

ethical principles to adhere to.” This constant mode of internal

challenge actually inhibits progress.

So what can the global industry do in aiding the organizations in

resolving this issue, as a start towards having effective talent

development strategies?


1. Co-create short training content that provides an overview for the

respective teams i.e. the sharia specialists get a business overview

and how their decision impact a business’s bottom line & the

commercial specialists get an overview of what are the key

guidelines to know in ensuring they can deliver a sharia compliant

product.

Taking it one level down, at an organizational level, the team i.e. of

commercial and sharia specialists could perhaps be given “joint”

business targets for achievement and joint rewards for achievement.

This would bring about joint talent development in the organizations

and allow them to maximize the knowledge and competency of their

talents for the benefit of the organization.

2. Accept and Implement a common global standard for

qualifications— like other professional qualifications develop and

implement a global standard for qualifications, including short term

courses, which all educational institutions and educational service

providers have to adhere to.

This will bring about a rise in the quality of the talent as well as

enable the industry organizations to have a standard on which they

can base their recruitment policies.

The advantage the Islamic finance industry organizations have, vis-

à-vis other industries, is that there are vast amounts of expertise

from their conventional counterparts already available for use rolling

out effective talent development plans.

But talent development will remain on the backbench, unless and

until, organizations take it upon themselves to align their business

goal, organizational values and talent competencies and approach

the academia with what they need.

Joy Abdullah is the head of marketing & communication at INCEIF

– The Global University of Islamic Finance

The opinions expressed is a personal point of view of the author and

is not an opinion from or on behalf of INCEIF.

“..talent development will remain on

the backbench, unless and until,

organizations take it upon themselves

to align their business goal,

organizational values and talent

competencies and approach the

academia with what they need.”


We would like to thank…

We would like to thank the following individuals and organizations for their moral support, assistance, and intellectual

contributions in this report.

Sameer Hasan, Business Director, Ethica Institute of Islamic Finance

Muhammed Ikram Thowfeek, Chairman & Founder, First Global Group

Muath Mubarak, Lecturer of Islamic Banking and Finance, First Global Academy

Dr. Syed Othman Alhabshi, Professor & Chief Academic Officer, INCEIF

Joy Abdullah, Head of Marketing & Communication, INCEIF

Muhammad Zubair Mughal, Chief Executive Officer, AlHuda CIBE

Almir Colan, Director, Australian Centre for Islamic Finance

Commitment

Islamic Economics & Finance

Focus

Education

Strength

Research and Marketing

Second Nature

Creativity


Appendix: List of Institutions (Academic)


Appendix: List of Institutions (Non-Academic)


Thank You!

For any questions, please email us at [email protected]

Sources of data: Yurizk Research

All images used in this report are copyright of their respective owners and collected from various published online sources.

The report is presented for research and information purposes only and not intended to give advise on any investment decision related to the

subject matter. Yurizk do not assume any responsibility for any losses that may arise from the usage of information from this report by any individual

or organization.

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GLOBAL ISLAMIC FINANCE EDUCATION 2013 · 2015-03-26 · Global Islamic Finance Education 2013 7 Scope Limitations We took every care to ensure data accuracy as humanly as possible