Growth of Islamic finance drives demand for degrees | Financial Times 4.02.

2019 21(48

Get a fresh start. Choose your FT trial

Special Report Business Education: Financial Training Show articles

Islamic finance

Growth of Islamic finance drives demand for degrees

Expertise is increasingly required in sharia-compliant sector and beyond

Moral maze: Lukman Hakim quit his banking role for a future in Islamic finance © Dave Charnley for the FT

Seb Murray JUNE 17, 2018

After 13 years building a commercial banking career in Indonesia, Lukman Hakim quit and went to
business school in pursuit of an “ethical” future in Islamic finance.

The 35-year-old Indonesian last year enrolled on the 12-month MSc in Islamic finance at Durham
University Business School in the UK and plans to work in the industry after he graduates.

Islamic finance is a method of banking that abides by sharia law, which forbids charging interest
and gambling.

“Conventional finance has a problem with transparency and fairness,” says Mr Hakim, who is a
Muslim. “I think those problems can be addressed by sharia law, which I believe encourages us to
do business morally and ethically.”

Like-minded bankers such as Mr Hakim are helping to drive the growth in provision of Islamic
financial training. Once an optional course, the subject has become a masters degree at well-known
business schools.

Madrid’s IE Business School, which is a partner with the Financial Times in a corporate learning
alliance, created a custom masters in Islamic finance in 2014. The course is available only to
students on a two-year talent development programme at the Islamic Corporation for the
Development of the Private Sector (ICD) in Saudi Arabia, which finances private sector investment.
Participants study IE modules in Madrid, Saudi Arabia and online.

Globally, the number of institutions offering Islamic finance degrees has risen from 141 in 2014 to
191 in 2016, according to ICD-Thomson Reuters Islamic Finance Development reports.

One catalyst has been the growth of the sector. There are 1,407 Islamic financial institutions

globally, from retail to investment banks and asset managers. The 2017 ICD-Reuters report put the
Islamic finance industry at $2.2tn of assets in 2016 and forecast that it would grow to $3.8tn of
assets by 2022.

Some employers are demanding that graduates have specialist knowledge of sharia-compliant
https://www.ft.com/content/7fe86024-699c-11e8-aee1-39f3459514fd Page 1 of 4
Growth of Islamic finance drives demand for degrees | Financial Times 4.02.2019 21(48

Some employers are demanding that graduates have specialist knowledge of sharia-compliant
finance, according to Celia de Anca, the director of IE’s Saudi-Spanish Center for Islamic
Economics and Finance.

She says that job opportunities at Islamic financial institutions are sparse because the industry is
still small when compared with conventional finance.

However, Prof de Anca adds that finance graduates are now expected by employers to know sharia
law. “It’s a handicap not to have knowledge of Islamic finance. If you work for, say, Citibank, at
some point there will probably be a sukuk sale,” she says, referring to a bond that is structured to
comply with sharia law.

Many of IE’s Islamic finance graduates work in trade, project finance, asset management and
private banking, she says. “Any roles that deal with Gulf Co-operation Council states such as Qatar

Feedback
will probably require Islamic finance knowledge because they are big markets for it.”

Abdullah Hidayat Mohamad, 35, who is Malaysian, completed the IE course last year and
established Social Finance Sdn Bhd, an Islamic finance consultancy in Kuala Lumpur. In his
previous career he worked for an asset management company.

“People want to hire me as a consultant because the degree gives me

credibility,” Mr Mohamad says.

One of his projects is creating a sharia-compliant

money market based in Malaysia, which banks use to
Academics fear that a borrow and lend money between themselves,
subject connected to religion typically with instruments such as deposits. He hopes
is at odds with business to expand the project globally and says the IE course,
schools whose participants came from around the world,
including Africa, will help him work with global
teams.

“Although much of the Islamic finance industry is in majority-Muslim countries, there are cultural
differences,” says Mr Mohamad.

He cites murabaha contracts (when a bank sells a client goods for cost plus profit instead of
charging interest), which are widely used in Malaysia but not in Indonesia. “You need to adhere to
conventions. That has been very helpful to know,” he says.

Henley Business School, at the University of Reading, launched an MSc in investment banking and
Islamic finance in 2008 that was taught in the UK and Malaysia. From this year it will be offered
only in Malaysia, where demand from students is high, and where the school established a
permanent campus in 2015. Some 39 per cent of applicants so far this year are from the country —
the largest contingent.

One reason is the lack of high-quality courses locally, says Teck Yong Eng, head of Henley Business
School Malaysia. “Islamic finance faculty are hard to recruit, partly because the field is relatively
small, so the supply of specialists is low,” he says. They can command high salaries as a result,
making it even harder to hire them, he adds.

Some academics are concerned that a subject connected to religion is at odds with business
schools, which pride themselves on independence. Mehmet Asutay, the director of Durham’s MSc
in Islamic finance, says that some business schools have steered clear of the topic for that reason.
“Professors often ask whether Islamic finance is a religious rather than a business subject.”

Mohd-Pisal Zainal, associate professor at Henley Business School Malaysia, believes that
misconceptions about Islamic finance could deter students from pursuing the subject.

He relates the example of when he was delivering a speech at a UK law school in 2015 — shortly
after a man had attacked French police with a knife. “When it came to the Q&A, the question
people asked most was: ‘Does Islamic finance fund terrorism?’ ”

European Financial
https://www.ft.com/content/7fe86024-699c-11e8-aee1-39f3459514fd Page 2 of 4
Growth of Islamic finance drives demand for degrees | Financial Times 4.02.2019 21(48

European Financial
Forum
Dublin
13 February 2019
Policies and Business Models for a Changing
Financial Landscape

Register now Presented by

Get alerts on Islamic finance when a new story is published Get alerts

Copyright The Financial Times Limited 2019. All rights reserved.

Paid Post

Explore the Special Report

ABOUT THIS SPECIAL REPORT

The 2018 FT Masters in Finance pre-experience and post-
experience programme rankings; student-led funds teach
real-world investment; the rush to learn blockchain; getting
women into finance; China and the west compete for Asian
students; Islamic finance
Currently reading:
Growth of Islamic finance drives demand for degrees

Business schools target women in finance

Business schools race to offer lessons in blockchain and bitcoin

Fintech entrepreneurs show why finance masters are not just for bankers

Hands-on trading experience helps graduates find investment jobs

Career profile: from engineer to trader to entrepreneur

Masters in Finance rankings 2018: key and methodology

See all 10 stories

Follow the topics in this article

Islamic finance
Business school
UK universities
Masters in Finance
UK

https://www.ft.com/content/7fe86024-699c-11e8-aee1-39f3459514fd Page 3 of 4
Growth of Islamic finance drives demand for degrees | Financial Times 4.02.2019 21(48

https://www.ft.com/content/7fe86024-699c-11e8-aee1-39f3459514fd Page 4 of 4