Australian Arab Business Council Sparks Dialogue on Islamic Finance and Inclusion

The Australian Arab Business Council hosted the ‘Balancing Opportunity, Regulation and Financial Inclusion’ event at La Castelle Bankstown on Wednesday night. The event featured three guest panel speakers to discuss Islamic Finance, Dr Imran Lum, head of Islamic Finance at NAB, Asad Ansari, Co-Founder of Amanah Islamic Finance and Dr Anisa Buckley, Authorised Credit Representative at AMANAH Islamic Finance.

Ansari began the night by highlighting an interesting point when asked about what Islamic finance is all about, pointing out that if you look at all the Abrahamic religions and Hindu scriptures, they have all had some restrictions on interest. He also said that Islamic banking has a back-to-basics type of banking with an ethical overlay and mentioned that there are restrictions on certain types of industries, and you can’t invest or engage in industries like gaming, alcohol, etc.

Dr Lum dug into the concepts of Islamic Finance and mentioned that when you talk about Islamic Finance, there are two concepts: the concept of Islamic Finance as a philosophy and its underlying nature and Islamic Finance in practice, existing in a capitalistic world. “Islamic Finance, in its purest form, is supposed to be where the financier takes the risk. So the financier and customer jointly take the risk in a venture,” Dr Lum highlighted.

Dr Buckley mentioned that Islamic Finance is becoming a booming industry, but it needs more work in terms of financial literacy among women and increasing confidence in being able to know what to do and get into the market. She mentioned that her focus is on women’s understanding of finances and how they can take a leading role in understanding finance and figure out what their financial journey is going to look like.

Dr Buckley started her business one year ago, and her business is still in its early crawling stages. According to Buckley, it has a good track record. The business is based here in Sydney, but she has customers from all around Australia, from WA, Victoria, Tasmania, QLD and SA. Dr Buckley said the business is run in a digitalised way through contacting customers through email, phone and virtually.

She said her customers are generally Muslim and want to see how the product stacks up and the types of offerings that they have. ” A lot of people have been renting most of their lives and have been waiting to see something they can trust, that they feel confident in, that they know is Shariah compliant,” she said.

Dr Lum emphasised the challenges of establishing Islamic Finance offerings at NAB and said it was incredibly difficult. He expressed how there is no support from the government and compared it to countries like the UK, Singapore and Luxembourg, which all have amended tax laws to facilitate Islamic Finance.

He said that they proved that there is a market with Islamic Bonds, which was the first billion-dollar insurance in the Islamic capital markets. ” We kind of converted all the underlying leases to what we call commercial high purchase compliant high purchase agreements,” Dr Lum said. He said they got around the structure and tax, but the government shut it down.

According to Dr Lum they got a lot of foreign investors who wanted to invest in property and get financing onshore. “We managed to do a few deals to show there is a market, and then it took me 5 years to convince Nab to launch their own product,” Dr Lum highlighted.

Dr Buckley also shared her view on the lack of government support for Islamic Finance. “I think governments in general are slow-moving, just the amount of bureaucracy that takes place and so many things the government really needs to say that there is a good track record, that there is a substantial track record, that there is benefit for the country,” Dr Buckley highlighted.

Additionally, the night featured dinner and fruit alongside drinks and an opportunity to engage in meaningful discussions and network with a wide range of business leaders.

OZ ARAB MEDIA/ Zaid Siddiqui