In the wake of the 2008 financial scandals that rocked the global economy, two questions are gaining importance in the financial sector:
- - How can companies remain profitable while implementing a greater commitment to ethics?
- - What financial strategies offer new markets and growth potential to help recover from recent losses?
One answer to both questions is Islamic finance, a profit-making financial system with interest-free loans and no speculation. With global economic crises occurring because of problems in conventional banking practices, Islamic finance offers an alternative structure that supports financial value and ethical practices while providing a wide range of products from corporate finance to asset management.
But the answer of Islamic finance may give rise to more questions, such as how would your business generate profits? How would you grow your savings’ value without financial speculation? How can such a system succeed? Can non-Islamic companies participate in Islamic finance?
The fundamental principles of Islamic finance have existed and prospered for many centuries, evolving over time to incorporate and insist upon specific tenets that follow Islamic law, or shariah. While shariah largely governs personal and family practices, Islamic finance’s foundation in shariah provides time-tested practices that allow investors to engage in profitable and value-based financial transactions. Even companies not based in Islamic regions may employ Islamic finance structures if they follow the ethical practices engendered in these tools.
Today, the market for Islamic finance is growing steadily in European and many Muslim countries—including the Gulf countries, a region with the highest liquidity. Financial professionals in the international market must recognize the rising capabilities offered by the unique solutions of Islamic finance to improve competitiveness while adhering to high ethical standards.
How is your company approaching the profit versus ethics question? The Accenture Academy course Introduction to Islamic Finance provides an overview of Islamic financial principles and practices to enable you to enter this emerging industry.