Khartoum - "Only a fraction of US$11.5 trillion worth of wealth owned by Muslim individuals, institutions and government is managed by Islamic banks and financial institutions. About US$9.5 trillion remain outside the global Islamic financial services industry that has US$2 trillion asset under management," said Professor Humayon Dar, Chairman of Edbiz Corporation at the 2nd Annual International Forum on Islamic Finance in Khartoum, Sudan.
Sharing the session with Fadi Al Faqih (CEO of Bank of Khartoum) and Professor Rifaat Abdul Kareem (CEO of International Islamic Liquidity Management Corporation, Malaysia), Professor Humayon Dar pointed out that the missing dollars are managed by Western financial institutions. Consequently Islamic banks and financial institutions are losing potential revenue of US$180 billion on an annual basis.
"This is a huge loss to the Muslims communities and Islamic banks," he asserted. According to him, Islamic communities do not benefit from US$287.5 billion worth of Zakat money that does not flow back from the Western countries where Islamic wealth is being managed. "This also brings a potential loss of revenue of US$3 billion to Islamic money managers," Professor Humayon Dar highlighted.
Quoting the recent Islamic Wealth Management Report 2016 published by Edbiz Consulting, Professor Humayon Dar shared that 40% of Islamic wealth in concentrated in non-Muslim countries. Capacity issue, according to him, was the underlying reason. "Risk appetite of Islamic investors, both institutional and individual, is consistent with product availability in the West," explained Professor Humayon Dar.
"Islamic banks have a role to play in extending the social impact of Islamic finance to the wider society," he argued. Professor Humayon Dar's suggestions that Islamic banks should develop donation-based products through platforms similar to crowdfunding was well received by the conference participants. "Cash Waqf is another product that should be of interest to Islamic banks," he added. Another area of improvement is provision of Islamic wealth management solutions. "Incentive-based Islamic investment products are in vogue in the GCC, and there is a need to develop charity-based retail sukuk with embedded prizes for the general public in Sudan," he suggested.
The 2nd Annual International Forum on Islamic Finance aims to highlight the experience of Sudan's Islamic banks in funding large-scale infrastructure projects, improve trade flows and spur funding for micro, small & medium-sized enterprises. Edbiz Consulting is the media partner for this forum, while Bank of Khartoum is the international strategic partner.
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About
Edbiz Consulting is a global Islamic finance think tank with offices in London, Istanbul and Islamabad. For more information, please visit: www.edbizconsulting.com. Edbiz Consulting provides multiple services that balance the dual purpose of developing thought leadership in this niche industry and strengthening the Islamic finance capacity for businesses and banks. Its client base is diverse and includes financial institutions, governments, education providers, established businesses and entrepreneurs.
© Press Release 2016
© Press Release 2016
