June 2008The oil boom sending Arab financial markets into frenzy has generated worldwide interest in Islamic finance. But this relatively nascent segment is in much need of a new breed of financiers boasting financial skills, as well as in-depth knowledge of sharia. Universities have responded to the trend by offering Islamic financial specializations.
According to Hanudin Amin, Head of the Islamic Finance Program at the University of Malaysia Sabah-Labuan, Islamic specialization is a growing field in finance, one that has received the Malaysian government's full support. "Islamic deposits and the market share of Islamic finance are estimated at 11-12%, a figure which should increase for both in the next few years. Many foreign countries have also shown interest in Islamic finance such as New Zealand, Japan and Hong Kong," he explained.
Dr Humayon Dar, Senior Honorary Visiting Fellow in Islamic Finance at the London Cass Business School, which provides an executive MBA with an Islamic stream, believes that skill shortage in this particular area of finance is more profound than in other sectors, saying "With 15% consistent growth over the last decade, Islamic banking and finance poses new challenges to academic institutions and professional bodies since specialized personnel needs to be trained in sufficient numbers."
And Lebanon is no stranger to the trend. The IFQ (Islamic Financial Qualification) was launched about a year ago as a joint venture between the British Securities and Investment Institute and the Ecole Supérieures des Affaires (ESA) in Beirut. Initiated by the Lebanon's Central Bank with the support of Dr. Ahmad Jachi, first vice-governor of the bank, the qualification is available in the UK, Kuwait and Dubai, as well as in Beirut through ESA. "It is a global benchmark qualification that covers Islamic finance from both a technical and a sharia aspect," explained Jan Schaaper, academic coordinator at ESA.
The qualification is aimed at those already working in Islamic finance or in the conventional banking industry and is preparation for key positions in the areas of Islamic finance and Islamic insurance. "No prerequisites are imposed on candidates who often have different professional backgrounds, such as law, consultancy and insurance," according to Sandra Abboud, project coordinator at ESA.
At Cass, prerequisites for the executive MBA in Islamic finance are similar to other executive MBA programs. "However, we are particularly interested in candidates who have been previously exposed to Islamic banking and finance," said Dar, underscoring the university's Islamic specialization is similar to other specializations from an academic rigor point of view. In Malaysia, the Sabah-Labuan University accepts students with a diploma in any field related to finance, economics, business or management.
"With the IFQ, candidates will acquire practical insight into designing and setting up financial instruments such as murabaha, mudaraba, sukuk, musharakah, salam, istithna, Islamic funds and takaful," Schaaper pointed out.
IFQ seems to be generating wide interest as Gulf nationals and EU specialists seek it out. "About 200 people sat for the qualification last year," reckoned Abboud.
At the Sabah-Labuan University, students are mostly Malays from the country's various provinces. According to Amine, some 50 students will be graduating this year in Islamic finance, a program that was introduced in 2004. Amine expects the program to grow to more than a hundred students graduating every year. "We started our campaign for the executive MBA in Islamic Finance late last year but were very happy to recruit about 30% of our Dubai students into the Islamic finance stream," Dar said.
Schaaper explained that, given the qualification's popularity, in October 2008 ESA will launch the Executive Master in Islamic Financial Management (XIFM) , in collaboration with the Rotterdam School of Management of Erasmus University. The XIFM will be focusing on the managerial aspect of Islamic finance using valuation, risk management and decision making, while allowing students to master Islamic finance techniques and to develop their strategic ability by identifying synergies between conventional and Islamic finance. The program targets managers of institutions operating in both the conventional and Islamic finance field. Schaaper pointed out that the new XIFM offered by ESA and the Rotterdam School of Management is solely dedicated to Islamic finance. "Our goal is to build a bridge between conventional and Islamic finance. The program aims at measuring and quantifying risks inherent in Islamic financial products, we therefore selected the best specialists in financial technique and Islamic sharia to help develop the program."
On the other side of the globe, at Sabah-Lubuan University, students are exposed to a number of courses, such as Islamic accounting systems, Islamic fund management, Islamic banking practice, Islamic finance as well as microeconomics, accounting, basic finance, and business mathematics. "This program differs from other financial modules due to its intrinsic Islamic values, Islamic ethics and verses," suggested Amin.
According to Dar, the Cass Business School EMA offers three specialised modules on Islamic economics, finance and law as well as a project.
"The Islamic financial MBA is an executive MBA with an Islamic focus," he emphasized. "The main objective of this specialization is to produce a new breed of Islamic bankers who are well-equipped with the conventional banking and finance tools and have a firm understanding of Islamic banking and finance."
© Executive 2008
Article originally published by Executive 12-Jun-08
