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It seems that Islamic finance is getting a makeover. Recently there have been
various (some light-hearted) attempts to dissect Islamic finance: from comparing
Islamic finance to every-day items, tongue-in-cheek forecasting of industry
developments, clever use of soccer metaphors, to berating the much-hyped
self-congratulation that we periodically witness in conferences and industry
events. This kind of commentary, taken as a whole, hints to a desire to revisit
the message of Islamic finance and how this is communicated.
One of our contributors recently inquired about who had coined the term Islamic
finance, and this led to discussions surrounding the first forays into Islamic
Economics and looking further back to the early days of Muslim commerce. Almost
simultaneously I had been asked to provide feedback to one of the
above-mentioned questionnaires, one of them asking us to identify what everyday
items best resembled Islamic finance. The latter was an intriguing exercise
since it was effectively reaching out to our subconscious perception of the
industry.
These were intriguing queries, looking at the origins of Islamic finance
(exactly where it came from) and the characteristics we ascribe to this industry
(metaphorically speaking that is). Overall, these and many other approaches
carry a common denominator, they are all trying to make the topic more
accessible to the masses.
Perhaps...
Perhaps the definition of Islamic finance is too eccentric for a lay person, in
other words it doesn't make sense except to those who are already familiar with
Islamic finance in the first place. Furthermore, it appears that there is no
standard definition of Islamic finance (some are even circular - making
reference to Islamic banking... what good is that!) and all of them lack
simplicity (often degenerating into multi-paragraphed expositions).
Naturally, the core of Islamic finance is Shariah, but once again it does not
lend itself for easy assimilation by newcomers. Then again, there have been many
qualities ascribed to Islamic finance: borrowing from ethical and sustainable
finance, focusing on the interest-free and participatory nature of its products,
to the socially responsible and community engagement role of its member banks.
All of these terms are valid, but there is yet to be a definition that is all
encompassing.
Perhaps...
Perhaps the message is not being communicated effectively, not reaching or
catering to the right audience (specifically those weird people outside of the
industry which we will refer to from now on as "consumers"). Yes consumers are
the ultimate audience, and as we see discussions gravitate around the definition
it is equally important to observe how such definitions are being delivered.
Even a cursory survey of industry portals yields very few definitions of Islamic
finance or Islamic banking, presumably because they are such obvious terms that
they don't require an introduction. However, communicating what is Islamic
finance could use novel tools and some lateral-thinking. Sometimes metaphor,
symbolism, and even parody can help illustrate the inner-workings of the
industry.
Perhaps...
Perhaps it matters little what we consider to be the 'correct' definition of
Islamic finance. Notice my attempt to avoid offering a definition (attribute
this to laziness if you will). It might be that what needs to be redefined is
the focus of the industry. The most important concern is not a few sentences or
a nominal description, but rather to engage more people and broaden the appeal
of Islamic finance - beyond the limited walls of a few service providers.
Definitions are useful, but they are of little use if the industry keeps talking
to itself.
Your feedback and comments are very important to us, please feel free to contact
the author via email.
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