Islamic banking is a viable option for non-Muslims as well, said
Dr Volker Nienhaus, professor of economics and former president of
the University of Marburg, Germany, at a recent lecture in Doha.
He also observed that while Islamic banking comprises only around
10% of global banking, it is growing steadily.
Dr Nienhaus made the statements
while delivering a lecture on the topic, “Islamic Finance for
Non-Muslim Clients: Are There Great Potentials?” at Qatar Faculty
of Islamic Studies (QFIS), Education City.
Speaking on the benefits of Islamic financing for non-Muslims, Dr
Nienhaus said: “Islamic banking has come a long way and become a
viable option for everybody, including non-Muslims. A Shariah-compliant
banking scheme is a better financial option as it has no excessive
risks and does not engage in questionable businesses.”
Islamic banking, he added, is fundamentally not too different from
conventional banking except for the fact that it does not deal
with any “haram” product.
Dr Nienhaus said socially-responsible investment was gaining
momentum around the world and Islamic banking could benefit from
“In 2010-2011, socially-responsible investment was worth $3tn in
the US, while it was around $8tn in Europe. The total amount of
Islamic banking for the same period was $1.6tn. The value of
global financial assets through conventional banking was about
$180tn,” he said, adding that socially-responsible investment was
also in keeping with the ethical aspects of Islamic banking.
Dr Nienhaus stressed that Islamic banking had to go through
various filters to ensure that it fully complied with all Islamic
principles of financing.
“Firstly, it goes through industrial
screening to make sure that it does not involve any of the
products that are ‘haram’ to Islamic beliefs. Then, it undergoes
financial screening to ensure that the companies have a very
tolerable ratio of commercial interests.”
He highlighted that in the Kuala Lumpur Stock Exchange, 85% of the
shares were Shariah-compliant.