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UAE is the global centre for Islamic finance: Al Awadi

Abdul Basit / 23 June 2011

DUBAI - Industry experts highlighted key challenges, business prospects and export opportunities in various key markets in the Islamic finance sector at a forum hosted by Dubai Exports.

The forum, held in partnership with Zawya, a leading provider of financial information in the MENA region, brought together leading local and international scholars and practitioners from the sector. It also showcased presentations about Islamic finance opportunities in Germany, Africa, Indonesia and the Arab World as well as the Takaful sector.

Dubai has shown that it can be innovative through the development of new Shariah-compliant products to meet the needs of an ever increasing and sophisticated investor. Ensuring that the UAE is the global centre for Islamic finance, Engineer Saed Al Awadi, Chief Executive Officer, Dubai Exports, stated, “Two years ago we decided to start promoting UAE’s capabilities and expertise in Islamic or Shariah compliant financial services to major markets abroad. We were not surprised by the overwhelmingly positive response to the mission and the successful outcomes that have been achieved to date. I strongly believe that as the leaders and pioneers in the sector our firms have the necessary expertise to channel this sector in international markets.”

Zawya and Dubai Exports, an agency of the Dubai Department of Economic Development, or DED, Government of Dubai, have produced the first UAE Islamic Financial Services Directory.

Al Awadi said: “I believe that the directory will lead to greater product development within the Islamic Financial services sector as more investors and borrowers see its great potential. I strongly encourage everyone to use this valuable resource in order to identify appropriate partners from the UAE.” At the forum, Dr Hussain Hassan, Managing Director, Dar Al Sharia, a prominent scholar and member of 38 Shariah boards, delivered the keynote speech and discussed the key challenges facing Islamic finance.

One of the important aspects that came across was that Islamic Finance is not limited to just Muslims and is open to everyone. In fact, according to a survey conducted by one of the Dubai-based Islamic banks, two thirds of its customers were not Muslim. The main reason for such is that customers realise the ethical properties of Islamic financial products and services and are making a conscientious decision to seek them in the marketplace.

In terms of products, the forum discussed the challenges relating to sukuks especially in the post international financial crisis period. Today’s sukuks are not only far larger in size than those available a decade ago but more sophisticated reflecting the particular needs of clients.

It is expected that the growth of Islamic financial services will continue to grow over the foreseeable future as it moves away from it traditional captive markets of Islamic countries.

In recent years, a number of countries have embraced Islamic finance and made the necessary regulatory changes so as to treat it at par with conventional banks. These changes have allowed Islamic financial institutions to be established in new countries and thereby increasing its market coverage.

Furthermore, the overwhelming demand for Shariah compliant financial services has meant that financial institutions have been developing highly innovative products and services to meet these increasing needs. A typical example, which was discussed at the Islamic Finance Forum, is the development of financial derivatives.

 abdulbasit@khaleejtimes.com

 
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