Awareness of Islamic banking products among Muslims: The case of Australia
- PDF / 128,502 Bytes
- 10 Pages / 595 x 765 pts Page_size
- 34 Downloads / 183 Views
Hussain Gulzar Rammal* is a lecturer in International Business at the University of Adelaide. He holds a bachelors degree from the University of Melbourne and a Master’s degree from Flinders University. He has published in numerous international business journals in the areas of Islamic financing, international trade and international business negotiations.
Ralf Zurbruegg is a professor of Finance at the University of Adelaide. He holds an undergraduate degree from the London School of Economics and a Masters degree and PhD from the University of Manchester. He has published over 70 articles, with the majority appearing in leading finance journals. His primary research interests lie in risk management issues, particularly as they relate to insurance, derivatives pricing and securitised real estate assets. He has consulted for numerous financial institutions over the years on risk management topics and is also the co-editor of the International Journal of Managerial Finance.
Abstract The purpose of this study is to examine the awareness of Muslim Australians of Islamic banking, particularly profit-and-loss sharing agreements. A sample of 300 Australian Muslims were surveyed utilising a short questionnaire containing specific questions relating to the willingness of respondents to purchase profit-and-loss sharing Islamic banking products. The results indicate that the majority of the respondents are interested in purchasing these products, but are not properly informed about how they function. It was common to find respondents who were keen to purchase Islamic banking products, but only if credit facilities were available. This is contrary to Islamic Shari’ah law, and suggests a lack of understanding of the principles of Islamic finance. Journal of Financial Services Marketing (2007) 12, 65–74. doi:10.1057/palgrave.fsm.4760060 Keywords Islamic financing, interest-free financing, profit-and-loss sharing, Australia
INTRODUCTION The concept of interest-free financing was practiced by Arabs prior to the advent of Islam, and was later adopted by Muslims as an acceptable form of trade financing. While the system had been used on a small scale for centuries, its commercial application began in the 1970s.1 Since then Islamic financing has experienced worldwide acceptance, and by
*Correspondence: School of Commerce, The University of Adelaide, 233 North Terrace, Adelaide, South Australia 5005, Australia Tel: + 618 83034513; Fax: + 618 83037243; e-mail: [email protected]
© 2007 Palgrave Macmillan Ltd 1363-0539 $30.00
Vol. 12, 1 65–74
early 2003 there were at least 176 Islamic banks around the world, with deposits in excess of $147bn.2 While Islamic financing has become popular in both Muslim and non-Muslim countries, the system has not achieved widespread success among Muslims in Australia. The main reason for this has been the lack of awareness about the principles of the system among the population.3 Australia’s Muslim population is increasing at a rapid pace, and based on the requirement of Shari’ah,4 one would exp
Data Loading...
