Fri, May 6, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Islamic Finance Intelligence

Editor's Note: Islamic Finance Incommunicado By Bernardo Vizcaino, CAIA

Friday, January 21, 2011

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.



Article Link

<< Go Back to Archive

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge funds see $14.3bn outflows in Q1, CTAs and multi-strategy lead net inflows[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry saw net outflows of investor capital in the first quarter of the year, totaling $14.3bn, data from Preqin showed. This continues from the $8.9bn overall net outflows that funds recorded in Q4

  2. Third Point calls Q1 "catastrophic" for hedge funds[more]

    Bailey McCann, Opalesque New York: The first quarter of this year was rocky for hedge funds based on aggregate performance from the industry, but now we are beginning to hear what the managers thought of it as quarterly letters make their way to investors. Dan Loeb, CEO of New York-based $17 bill

  3. Asia - Stabilization of China's capital outflows may hinge on Janet Yellen, Fink says China to do well this year as bubble threat postponed, Chinese hedge fund to invest in India’s infrastructure[more]

    Stabilization of China's capital outflows may hinge on Janet Yellen From Bloomberg.com: Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen. If the Federal Reserve chair sticks to

  4. …And Finally - After all, judges are human too[more]

    From Newsoftheweird.com: In March, one District of Columbia government administrative law judge was charged with misdemeanor assault on another. Judge Sharon Goodie said she wanted to give Judge Joan Davenport some files, but Davenport, in her office, would not answer the door. Goodie said once the

  5. Comment - Unmasking the men behind Zero Hedge, Wall Street's renegade blog[more]

    From Bloomberg.com: Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.) After more than a year writing for the financial website Zero Hedge under the n