Islamic banking is on the rise in the Netherlands. The Turkish bank KuveytTürk opened its first halal-bank in Germany last week. Now the bank is looking towards the Netherlands for further options.
This was said by Kemal Ozan, the general manager of the German branch of the bank. “After the opening in Frankfurt we would like to expand to the Dutch market.” He points to the large Muslim community in the Netherlands which consists of almost a million people. “There is a lot of potential for Islamic banking in the Netherlands.”
In 2008 The Dutch Bank and the Authority for Financial Markets identified a “substantial latent need” for Islamic banking products. However this never materialized. The Rabobank did experiment with interest-free banking products but without result. “We did have a look at it then but at the time it was not commercially interesting enough,” a spokesperson of the bank said.
The impediments are abundant: the quantity of Muslims is hard to establish and not all Muslims are orthodox practitioners of their faith. The Central Bureau for Statistics does forecast a considerable growth of the amount of Muslims in the Netherlands. Similarly, the average gross income of that group is increasing.
The most important impediment of the Dutch consumer market is the deduction of interest for mortgages. As a rule, conventional mortgages are cheaper because buyers of houses can deduce those mortgage’s interest from their taxes. Islamic mortgages would be easier to implement if a comparable settlement would be set up.
When the first Dutch Islamic bank will open in the Netherlands is not sure yet according to Ozan: “If our expansion is stabilized we will focus our attention on the Dutch market.”