LAHORE - India and China may step towards the Islamic finance in 2014 where more than 200 million Muslim populations are in compatible search of a financial system with their religious beliefs and thoughts. There is no doubt that international financial crisis will not hit the Islamic finance industry but due to the Arab Spring, Islamic finance industry has faced recession in some countries of MENA but there are chances of revival in 2014.
These views were expressed by Islamic Finance expert, Zubair Mughal who is also CEO of Al Huda Centre of Islamic Banking and Economics (CIBE) while commenting on Islamic finance industry in 2014. According to him, Islamic finance will grow with rapid pace in the year 2014 and its volume will pass through $ 2 trillion where Islamic banking keeps 78%, Sukuk 16%, Takaful 1%, Islamic Funds 4% and Islamic Microfinance has 1% share in the Islamic Finance industry. In the year 2014, Dubai and London will be in competition to be the global hub of Islamic Banking and Finance while Kuala Lumpur will also attempt to be in this contest but the Islamic finance industry can be grown more through synergizing approach and alliance with industry stakeholders rather than setting any competition.
He said that the Islamic finance industry growth will go on double digit in 2014 which will turn the $ 1.6 trillion volume of Islamic finance industry in December 2013 to US $ 2 trillion by the end of 2014 including North African countries (Tunisia, Libya, Morocco, Senegal and Mauritania etc), rising trends of Islamic finance in Europe and UK, also the rising and substantial share of international market of Sukuk shall contribute to it.
He said that Sukuk will grow rapidly in 2014 and Muslim countries including non-Muslim countries e.g UK, China, South Africa and Europe etc will also get benefit from it which will enhance the growth in Islamic finance industry but Takaful Industry is not supposed to have any substantial breakthrough.
It is being hoped that 2014 will prove better period for Islamic Microfinance industry as different international institutions including Islamic Development Bank (IDB) have declared it a potential tool for poverty alleviation around the globe. He also added that Islamic finance industry may face recession in certain countries including Indonesia while in Nigeria and Tunisia it may face some problems on religious and political grounds. He said that the Islamic finance initiatives in America and Canada including Latin American countries (Brazil, Argentina and others) have been taken and it is hoped that Islamic Funds market will come into existence in these regions by the year 2014.
To a question, Zubair Mughal said that there are multiple opportunities in Association of Southeast Asian Nations (ASEAN) countries to promote Islamic Finance, through which Halal Industry can be flourished rapidly in the region.
He stated that Islamic Finance and Halal Industry are complement to each other. Micro and Small Medium Enterprises (MSME’s) can be energized by utilizing Islamic Finance concept in the region which will be cause to reduce in poverty and ultimate socio-economic prosperity in the ASEAN member Countries. Presenting an analysis on ASEAN countries including Malaysia, Indonesia, Brunei Darussalam, Loa PDR, Myanmar, Singapore, Thailand and Vietnam, he stated that the approximate total population of ASEAN countries is 600 million including the Muslim Population more than 40% (240 million) which is a potential indicator for Islamic Finance growth whereas in Malaysia, Indonesia and Brunei Darussalam already have significant contributions in Islamic Banking, Takaful, Sukuk and Islamic Funds, while Philippines and Thailand are being considered as future potential markets for Islamic Banking and Finance in ASEAN countries.
He explained that Islamic Banking and Finance is the system not a religion which can be utilized by Muslim and Non-Muslims to get absolute benefits from the best services of Islamic Banking and Finance as its best example is the South Africa where Muslim population is less than 2% of the whole population but it has more than 5 Islamic Banks, 13 Islamic Funds and 2 Takaful companies working actively, which are equally famous among Muslims even non-Muslims communities because of their best practices and services.
He said that Philippines is an important country of the region with having 100 million populations, approximately, containing Muslim population by more than 7% which bears it out that there are momentous chances for the promotion of Islamic Finance and, apparently, government of Philippines found active in this concern and it will, definitely, energize Islamic Banking and Takaful in result.