The ICD-Thomson Reuters Islamic Finance Development Indicator announces initial findings

Thomson Reuters announced today (27 October) the initial findings from its collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB).

Earlier this year, Thomson Reuters and ICD announced the creation of the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI), a numerical measure representing the overall health and growth of the Islamic finance industry worldwide.

The ICD-Thomson Reuters Islamic Finance Development Indicator announces initial findings

The ICD-Thomson Reuters Islamic Finance Development Indicator announces initial findings

The IFDI, which will be officially launched at the Global Islamic Economy Summit, aims to expand the scope of Thomson Reuters’ universe of Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry. The indicator measures five key components – quantitative development, governance, social responsibility, knowledge and awareness.

Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters, said,  “This indicator, the first of its kind for the Islamic Economy, will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry.  The development of Islamic finance educational infrastructure will be a key driver for the establishment of the Islamic finance industry, which is why we chose the topic for our first IFDI analysis.”

Based on its analysis, the IFDI has found that the UK is the global leader in Islamic finance education with over 60 institutions offering Islamic finance courses and 22 universities offering degree programs specializing in Islamic finance.

Malaysia and the UAE, both established global Islamic finance hubs, followed the UK in terms of a comprehensive Islamic finance education infrastructure. Malaysia has 50 course providers and 18 universities offering degree programs, whilst the UAE has 31 course providers and 9 universities offering degree programs. Pakistan was placed fourth, with 22 course providers and 9 universities offering degree programs. The IFDI recorded 420 institutions offering courses in Islamic finance and over 113 universities offering Islamic finance degrees.

Malaysia also led in terms of research published on Islamic finance in the last three years, with 169 research papers, of which 101 were peer reviewed. The UK and USA followed with 111 research papers (56 peer reviewed) and 73 research papers (39 peer reviewed) respectively. A total of 655 research papers were issued globally on Islamic finance in the last three years, of which 354 were peer reviewed.

Khaled Al-Aboodi, Chief Executive Officer, Islamic Corporation for the Development of the Private Sector, said, “Today’s findings are a perfect example as to how and why the IFDI can identify the critical growth components of the Islamic Finance industry.  Our research shows that countries that build their educational infrastructure can benefit most from the growth of their Islamic finance industries.  Through their research and thought leadership countries, like the UK, Malaysia and the UAE have the potential to significantly influence the direction of the regional Islamic finance sector.”

Dr Sayd Farook, Global Head of Islamic Capital Markets for Thomson Reuters, said, “Research is an important metric used by the IFDI to assess the depth of knowledge dimension within the Islamic finance industry.   Our initial research indicates that the industry lacks the availability of in-depth research which, in turn, limits innovation and development.  Thomson Reuters is committed to leading the charge in information and analysis to support the global Islamic finance industry.”

The Global Islamic Economy Summit, organised by Thomson Reuters and the Dubai Chamber of Commerce & Industry, will take place on 25th & 26th November 2013 in Dubai, United Arab Emirates.

Morocco to promote Islamic finance

The issue of Islamic finance has taken centre stage in Morocco after the Justice and Development Party’s (PJD) electoral triumph.

Supporters of sharia-compliant banking pin hopes on the new government to create the first Islamic bank in the kingdom.

The PJD has talked of promoting Islamic finance on a number of occasions. Just a few days after his appointment as prime minister, Abdelilah Benkirane received a visit from Sheikh Khalid Bin Thani Al Thani, president of the Qatar International Islamic Bank (QIIB), who set out plans for establishing an Islamic investment bank and insurance company in Morocco.

Bank Al-Maghrib Governor Abdellatif Jouahri said last month that Morocco was interested in Islamic finance and viewed the idea of creating Islamic banks as part of the new financial platform in Casablanca.

A chapter on finance to meet the demands of sharia law will be included in the new banking law, he said.Meanwhile, economic analysts are critical of Morocco’s delay in enforcing Islamic banking.

According to economist Slimi Noureddine, the political will to promote Islamic finance is lacking. He insisted that Morocco should take the matter in hand to benefit from Arab investment, particularly from the Gulf states.

According to Bank Al-Maghrib, the worldwide market in Islamic finance will double in 2015, with a predicted value of $2.8 trillion (2.19 trillion euros). In Morocco, transactions coming under the umbrella of Islamic finance barely accounted for 800 million dirhams (72 million euros) in the third quarter of last year, which is a drop of 100 million dirhams (9 million euros) from 2010.

Officials blame this reduction on the reluctance of Moroccan banks to set up institutions which specialise in alternative finance, Noureddine said. He added that the expenses of alternative products can also be prohibitive, in addition to the slow-down in the housing market in recent months.

The analyst commented that Morocco should draw inspiration from successful experiences in other countries, so that this sector can be developed to meet public aspirations.

The African Development Bank, he said, has just published a report on the current situation of Islamic finance in North Africa.

“The report underlines that Islamic banking services in these countries, including Morocco, are struggling to develop, and looks at their future prospects and the extent to which they could contribute to economic development,” Noureddine said.

According to PJD Assistant Secretary-General Lahcen Daoudi, there has been much talk about the theory of Islamic finance in Morocco, but now the time has come to explore this channel which could bring considerable amounts of capital into Morocco.

He added that the sector is calculated to be worth more than a trillion euros worldwide.”Morocco needs to bring in regulations dedicated to this sector to attract a large part of it,” Daoudi said.

http://www.zawya.com/story.cfm/sidZAWYA20120118051821/Morocco_to_promote_Islamic_finance