What's holding us back?
Islamic finance seems to have more visibility these days than ever before. The industry continues to grow even as the world struggles through myriad challenges. Sukuk issuance, after a slower than expected 2015, has rocketed back up in 2016, at record rates (as described in more detail later in this very issue).
But in the many discussions I have, it is clear that there are still things holding back participation in Islamic finance. But what are they? When I sat down with Abdelilah Belatik, Secretary General of CIBAFI at their first Global Forum in Bahrain recently, we discussed this issue as well
But rather than ask you all one at a time, we took to our website's poll section, which you should visit at CPIFinancial.net if you have not already, to pose this question. So, in your views, what is holding back participation?
The most popular response is something that shouldn't surprise you: awareness issues. Thirty- six per cent of you listed awareness as the biggest issue affecting participation. This is something that industry is keenly aware of, as you know, and bodies like CIBAFI and the DIEDC (also featured in this issue) dedicate a large chunk of their activities to increasing awareness. But what kind of awareness is most effective? CIBAFI's Belatik, for one, believes that people need to be aware of the link between Islamic finance and responsible finance, as ethical investment has become a trend beyond the Islamic world.
Almost 27 per cent of our website readers selected lack of global Shari'ah harmonisation. This is another refrain we have spoken on time and time again, but also something that the industry is working diligently on. At every conference I go to from the Middle East to Southeast Asia to Africa and beyond, this is a top priority, and something we get closer to year after year.
Only 17 per cent said that insufficient product innovation was what was holding participation back, and I might be inclined to disagree with you. In many markets, it is product innovation that has driven new customers to Islamic finance. True innovation can often be the hardest part of the process to make time for, but that doesn't mean that a truly differentiated product line is what is going to really set Islamic finance apart from its conventional competition.
Two choices, 'ease and availability' and 'branding', issues we've spoken about at length in this magazine, came in at nearly five per cent each, which didn't reach, even combined, the 11 per cent of you that chose'other'. I'm not sure why we include that, honestly, because it's always a mystery to me what you might have meant. Please shoot me an email if you'd like to expound!
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