Macleans – January 16, 2012
Canada, with its 1.3 million Muslims, has lagged behind countries like the U.K. and the U.S. in embracing sharia-compliant financial products. None of the country’s big banks currently offer sharia-compliant services, though some smaller players do. Toronto-based UM Financial Inc., which issued home mortgages conforming to Islamic law, filed for bankruptcy last year, leaving 170 Muslim borrowers in limbo. Is the firm’s failure evidence that Canada should steer clear of Islamic finance; or proof that the country needs more of it–i.e. that the banks and policymakers need to bring the practice into the mainstream, with tighter rules and better oversight? This article features a debate with Tarek Fatah is the founder of the Muslim Canadian Congress, and Walid Hejazi is associate professor of international business at the University of Toronto’s Rotman School of Management, where he is currently teaching an MBA course on Islamic finance.