Banking, Big Interviews, Featured Work, From the Vault, Islamic Finance, Malaysia, Middle East, Pakistan - Friday, September 1, 2006 10:27 - 0 Comments

The Shariah scholar cartel: Asiamoney, September 2006

Asiamoney, September 2006

Author’s note: the boxes containing the interviews with the scholars are embedded in this story beneath the main text

They are a rare mix: men of God, religious legal experts, multilingual, and market savvy enough to be able to discuss the ins and outs of a hedge fund or a project finance syndication with investment bankers. It’s quite a skill set. And the dearth of these shariah scholars – men entrusted to certify the suitability of products for Islamic investors – represents the biggest bottleneck in the world’s fastest growing financial industry.

 The speed of development in Islamic finance is extraordinary, if difficult to quantify. There are now at least 250 shariah compliant mutual funds managing over US$300 billion. Moody’s has estimated 300 Islamic institutions hold a further $250 billion in assets, and Islamic windows of conventional banks (in which assets are held separately and managed under Islamic principles) account for probably another $200 billion. Just four years after the issue of the first international Islamic sukuk (similar to a bond), issuance is now over US$15 billion. It’s close to a trillion dollar industry if it isn’t already. Continue…

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