Islamic Finance Set to be a $ 2 Trillion Industry Globally Within Five YearsPress Release 24 May 2010 12:36 pm
Islamic Finance is all set to be a $ 2 trillion industry in the next half a decade according to Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters.
Speaking at a panel discussion at the MENASA Forum titled ‘The Challenges Ahead for Islamic Finance’, Siddiqui said: “It took the Islamic Finance industry 40 years to become a $ 1 trillion industry. It will take another two to five years to become a $ 2 trillion industry.”
However, there are many challenges that need to be overcome for the industry to realise its potential. Panellists said the lack of standardisation in the industry, the lack of consensus among Shari’ah scholars, the a poor “connectivity” between Islamic Finance institutions across the world, and the global shortage of experienced Islamic Finance professionals are some of the challenges facing the industry.
Apart from Siddiqui, panelists who participated in the discussion included Mutlaq H. Al-Morished, Executive Vice President of Corporate Finance, SABIC; and Harris Irfan, Head of Islamic Finance, Barclays Capital and Barclays Wealth. The session was moderated by Afaq Khan, CEO, Standard Chartered Saadiq.
Talking about the lack of standardisation and diversity of Sharia’h interpretation in the industry, Harris Irfan said it was becoming less of a challenge with the increasing convergence of standards. “I am 100 % convinced that we are seeing the convergence of opinion in Islamic Finance across countries, scholars and schools of thought.”
Earlier, introducing the discussion, Afaq Khan said that as with any fast growing industry, Islamic Finance also faces many challenges as the industry and its stakeholders try to keep pace with developments in human capital, access to Shariah guidance from scholars, changes in regulations aimed at allowing Islamic Finance to grow side by side with conventional finance and risk management both for Islamic Finance institutions and Islamic customers.
Talking further about the importance of strengthening risk management, he said that as the industry grows and offers a broader suite of products to its clients in home markets or in new geographies, it is exposed to new risks that must be proactively managed. Islamic banks now form a significant part of the financial market in several countries and therefore have a responsibility to manage the risk prudently so as not to disrupt the market as a whole, he added.
Hosted by DIFC, the MENASA Forum is focused on discussing the critical opportunities and challenges confronting the Middle East, North Africa and South Asia (MENASA) region over the next decade. Under the theme of 'Finance for the Next Decade of Growth', the MENASA Forum features over 250 members of the regional and international banking and financial services industry, regulators and senior business executives. The event is being held in association with Abraaj Capital and Deutsche Bank and supported by Barclays, Goldman Sachs and Shuaa Capital. Being held from 23 to 24 May, 2010, the Forum presents a mix of interviews, debates and keynote addresses featuring financial leaders, experts and investors.
The MENASA Forum commenced yesterday with a welcome dinner that featured a high-level keynote address by HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee. This was followed by a keynote dialogue with Arif Masood Naqvi, Founder and Group CEO, Abraaj Capital, and Juergen Fitschen, Member of the Management Board, Head of Regional Management Worldwide and CEO, Germany, Deutsche Bank.