Sharia MBAs on the rise as 25% more experts needed

Colleges scramble to train executives for $1 trillion Islamic finance market
The Islamic finance industry will need 15% more personnel over the next five years, said AAOIFI
By Bloomberg
Mon 26 Sep 2011 12:03 PM

A Bahraini group that sets standards for Islamic finance in
45 countries is helping universities start Sharia-compliant business courses to
avert a shortage of experts in the $1 trillion market.

The industry will need 15 percent more personnel over the
next five years and 25 percent more in a decade, said Khairul Nizam, deputy
secretary general of the Accounting & Auditing Organization for Islamic
Financial Institutions.

Pakistan is offering its first doctorate in Sharia banking,
while the United Arab Emirates has introduced an Islamic Masters of Business

“There is a shortage of people in the industry at the entry
level,” Nizam said. “We will need to make sure there are enough heads in the

Sharia-compliant bonds returned 6.9 percent this year,
according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, outpacing the 5.9
percent jump in emerging-market debt, data compiled by JPMorgan Chase & Co
shows. Countries including Nigeria, Thailand, Australia and France plan to
introduce legislation to facilitate Islamic financing, moves that will boost
demand for scholars to certify that the products meet Islam’s ban on interest

“If you don’t have quality people, then growth in the
industry won’t be sustainable,” said Azahari Kamil, the chief executive officer
of Kuala Lumpur-based Asian Finance Bank, a unit of Qatar Islamic Bank.
“Governments and central banks should encourage universities to come up with
more professional courses.”

The Canadian University of Dubai is offering a UAE-
accredited MBA in Islamic banking, Foteini Lavda, the institution’s marketing
manager, said in a statement. The International Islamic University in
Islamabad, Pakistan, started its doctorate course in Sharia banking to
compliment its Masters program in August, said Shagufta Haroon, the director of
academics. La Trobe University, based in Melbourne, began courses in the
subject last year.

Experts in Singapore are also setting up an association
focused on Sharia-compliant investments to foster links between bankers,
lawyers and investors in the Arabian Gulf and Asia, Raj Mohamad, managing
director at Five Pillars, a consulting firm in the city-state, said in an
interview yesterday. Mohamad will be the secretary of the new body.

The Accounting & Auditing Organization, known as AAOIFI,
has more than 200 members and its standards are used in Islamic finance in
Bahrain, Jordan, Lebanon, Qatar, Sudan and Syria, according to its website.

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The organization may issue 35 Sharia standards for Islamic
institutions in 2012, according to a Sept 7 statement, citing Secretary General
Mohamed Nedal Alchaar.

Under Islamic law, commercial transactions can take place as
long as the provisions don’t violate the Koran. The charging or receiving of
interest on a loan or bond is banned and investment in businesses that deal in
tobacco, gaming or alcohol are prohibited, making conventional stock and bond
indexes off limits to those wanting to invest in accordance with Islamic

 “We have been
speaking with a few universities to help them introduce some courses on Islamic
finance and we are helping other universities to improve the courses they
offer,” AAOIFI’s Nizam said. “We are also offering our own courses.”

Assets that comply with Islam’s tenets are estimated to
almost triple by 2015 to $2.8 trillion, according to the Kuala Lumpur-based Islamic
Financial Services Board.

Global sales of sukuk have risen to $17.4bn in 2011, from
$10.7bn in the same period last year. Issuance reached a record $31bn in 2007.

Islamic banking assets in Malaysia, which pioneered
financing along religious guidelines 30 years ago, have grown an average 20
percent annually since 2006 to 350.8 billion ringgit ($111bn) in 2010. The
Southeast Asian nation accounts for 66 percent of global sukuk outstanding,
according to the central bank’s annual report issued in March.

Australia and Thailand are pushing through legislation to
remove tax barriers on Sharia-compliant products that would pave the way for
issuance of Islamic bonds. Nigeria’s Stanbic IBTC Bank Plc, a unit of South Africa’s
Standard Bank Group, has been issued with a preliminary license to offer
Islamic banking services.

Stanbic would be the African nation’s second lender to gain

The International Islamic University of Malaysia offers
postgraduate and Ph.D. courses in Sharia-compliant banking and finance,
according to its website. The UK’s Durham University, also offers Islamic finance
courses, while Harvard University in Cambridge, Massachusetts, runs an Islamic
legal studies program through its law school, according to data on their

The Paris-based French Institute for Islamic Finance in
partnership with the French Institute for Management is providing vocational
training in Sharia-compliant finance through 15 programs, according to its

“There’s been a surge in Islamic finance courses,” said Nik
Norzrul Thani, chairman and senior partner of Kuala Lumpur-based legal firm
Zaid Ibrahim & Co.

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