"Skills training is a priority for the development of Islamic finance"

Dr Ghassen BOUSLAMA, Professor of finance, Coordinator of Islamic banking and finance courses, Reims management School – France

- During the two past years, France has experienced much progress in Islamic finance. There is a real political will to develop Shariah compliant instruments. In January 2009, the authorities have put in place the tax arrangements of the main tools of Islamic finance, such as sukuk and Murabaha. Others tax guidance are under progress for Ijarah and Istisna'a instruments.

- Recently, several announcements were made regarding the issuance of new sukuk and the creation of a new Islamic bank in France for the first half of 2010. But according to the progress made in the field, several obstacles remain. Thus, I think that we can not achieve these objectives within a year or more.

- I think that Islam is currently the second most widely professed religion in the Russian Federation. I’ve visited Kazan last year and I’ve discovered the presence of a large and very active Muslim population.

- Yes, I agree. Even we don’t know the exact number of Muslims in Russia, according to some experts, there are between 7 and 9 million people who practise Islam in Russia, and the rest are Muslims by ethnicity. Regarding this, I think that the market is very promising for Islamic finance. Moreover, the Russian economy is growing rapidly. It can provide opportunities which can attract Muslim investors looking for Shariah compliant investment.

- There are many obstacles for development of Islamic finance: the cost of finance, lack of harmonization in the interpretation of Shariah, the need to develop expertise on these financial instruments, or difficulty accessing directly the ultimate investor. I think that we can observe the same obstacles in Russia.

However, one of the most important challenges is training. It is very important to educate and inform the Muslim people who are the potential consumers about Islamic finance techniques. Several Muslims in many Muslim countries and in others where they are a minority didn’t know the actual functioning of Islamic finance and banking. Also, it’s important to inform and train Muslims entrepreneurs about Islamic banking and financial techniques. They are the ones who can create demand and accelerate the development of Islamic finance in Russia.

The Second challenge is the adaptation of legal, tax and accounting procedures and rules. Many efforts are necessary to enable the application of Islamic financing techniques. For example, with all the political will displayed in the last two years by the current French government to develop Islamic finance, things are moving today in small steps. Even after the recent progress made on tax issues, launching the first French Sukuk (Islamic bond) and the first Islamic bank, initially announced for the first quarter of 2010, were postponed. Several regulatory challenges remain to be done to expect the rapid development of Islamic finance in France. I think that we can expect the same obstacles in Russia.

- I think this event is very important for the development of the Halal industry. This event helps to alert the industry and authorities about to the benefits of such sector and its importance to the Muslim community. It can also measure the commercial potential of the sector.

I live in France where there are about 6 million Muslims and I can tell you that organizing such a forum in recent years has contributed to the development of several Halal brands. French manufacturers, hypermarkets and one of the largest known fast food companies has understood the benefits of this market and start its own Halal restaurants.

- One of the greatest challenges of the Halal food industry and even in Islamic finance is standardization. I think it's easier to achieve such an ambition for the Halal food Industries than for Islamic finance. I know there are many problems around the Halal certification especially in countries where Muslims are a minority. I hope that such topic can be discussed at this forum.

- Skills training are a priority for the development of Islamic finance. With the development of industry and the increasing interest on Islamic finance, several courses have emerged in this field to fill the skills shortage in France. During the last two years, more than five universities and business schools have launched courses and training programmes in Islamic finance field. These programmes vary from a simple introduction of six hours to specialized academic degrees.

Reims Management School has been the pioneer in offering training in Islamic finance in France. We have launched in the academic year 2008/2009 an “Islamic Banking and Finance" course as a specialized elective to students enrolled in our Masters in Management programme and in our MBA. Taught entirely in English, the course aims to provide an understanding of the fundamentals of Islamic finance and of its most recent applications. This course has attracted the interest of our students since more than 50 students followed this course. Similarly, we launched an introductory course in our master of science in finance and commercial banking. We are also studying the upcoming launch of a certificate in Islamic banking and finance (220 hours) and a major in our MSc in Finance and commercial banking that will be provided in English.

Staff reporter

26.03.2010