UK aims to become centre for Islamic finance
by SIMON HOOPER
Global Islamic finance market is valued at $1.3tn and is growing faster than the conventional banking sector.
“Already London is the biggest centre of Islamic finance outside the Islamic world, but today our ambition is to go further still,” Cameron told the event. “I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.”
“It means you should not be involved with interest, uncertainty and speculation,” Dzuljastri Abdul Razak, a professor at the International Islamic University in Malaysia, told Al Jazeera. “It’s basically about building the real economy. You can only sell something that exists. If you treat money as a commodity then there’s no asset.”
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Britain is the first non-Muslim country to host the WIEF, and Cameron’s presence along with a gala dinner hosted by Prince Charles, the heir to the British throne, and cameo appearances by Boris Johnson, London’s extrovert mayor, offered ample evidence of the event’s significance to the government.
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Cameron said the government was working on the practicalities of issuing a Sukuk – a bond-like financial certificate used to raise money that is based on shared ownership of an asset rather than a promise to pay interest – worth £200 million ($320m) by next year.
Though comparatively small, given that the UK currently owes investors more than £1.2 trillion ($1.92 trillion), Mehmet Asutay, an expert in Islamic finance at Durham University, said the announcement amounted to a “huge signal” of the government’s commitment to attracting Islamic money, especially from wealthy Gulf states.
“Like most European countries, the UK needs capital. Everyone knows capital is essential for sustainable economic growth and since the global financial crisis the sources of capital in the western world have dried up, but in the Gulf of course there is huge capital available,” Asutay told Al Jazeera.
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“The reality is that London has always been an important financial centre regardless of crises and ups and downs. It is open, it is very liberal and it hasn’t questioned the religiosity or the ideology of money. Its institutions have been around for longer than some of the countries we are talking about, so that gives London a lot of leverage.”
Al Jazeera for more
Plan for ‘Sharia-compliant’ student loans to get more Muslims into university
by GRAEME PATON
The plans for new student loans to encourage more Muslims to go to University were unveiled by David Willetts, the Universities Minister PHOTO/Geoff Pugh
A new system of “Sharia-compliant” student loans is to be launched to allow more Muslim students to go to university, it has been announced.
David Willetts, the Universities Minister, said an alternative financial model was being created to satisfy Islamic law that forbids Muslims taking out loans that make interest.
Under the system, students would apply for taxpayer-backed loans but repay them into a mutual-style fund that would be ring-fenced to provide future finance to other students with the same religious beliefs.
The move will raise concerns over a two-tier system in which Muslim students pay less than other undergraduates.
But the Government insisted it would be set up in a way that ensured repayments were made at the same rate as students who take out traditional student loans.
The Telegraph for more
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