Islamic finance makes a move into the mainstream

There has been a substantial Muslim community in the UK for at least 300 years, so UK financial companies may have been a little slow to cater for their monetary needs. But mainstream financial groups are quickly waking up to the fact that there are some 2 million Muslims in the UK whose financial needs must be met, as well as many more non-Muslims who agree with the ethics promoted by Islamic law, or sharia. Sharia governs, among other things, a Muslim’s economic and social life, dictating how believers should conduct themselves. It forbids certain activities and transactions: those involving alcohol and pork-related products, but also armaments, gambling, pornography and other activities deemed socially detrimental. Crucially, Islam places no intrinsic value on money, so earning or paying interest (riba) is prohibited – ruling out the majority of traditional mortgages, investments, savings and insurance products. So financial providers have had to do some creative thinking. The result, however, has been the launch of a wealth of new interesting and innovative products – some of which are now starting to capture the attention of non-muslims as well.