Low Muslim Income and Lack of Agreement among Sharia Scholars as Intrinsic Barriers to Islamic Financial Products
Islamic finance in Germany has, to the greatest possible extent, remained unsuccessful. A working paper from the Stresemann Foundation now shows that internal barriers especially are determinative. In the first place, Muslim immigrants are low-income and demonstrate little investment potential, because of having less formal education and because Muslim women often have no gainful employment. For another thing, the system of sharia scholars leads to problems due to nebulous legal practices.
“The present failure of Islamic financial products in this country cannot be attributed to lack of support by policy and the authorities,” declares Rebecca Schönenbach, author of the working paper and certified Islamic specialist. “In Great Britain and France as well, which have generously adapted their financial regulations to sharia-compliant banking, there is no demand from depositors.”
See also the thematic priority on Islamic finance.
As is explained in the working paper — referring to scientific studies — it is not just the limited income of the Muslim community that is important. A third of the Turks living here invest in real estate in Turkey, and barely a fourth in real estate here. Not even a fifth admit to having a savings account in Germany. There is practically no investment in other methods of saving, including Turkish, Islamic financial products.
On the part of the vendors, according to Schönenbach, there is the problem that the role of the sharia scholars has not been satisfactorily clarified. She says, “There are hardly any clear guidelines for fatwas; Islamic legal opinions and the various authorities are contradictory. Additionally, there is often a lack of economic knowledge and lack of independence in financial institutions. The scholars as a whole must produce transparency about the values of Islamic finance and sharia, and for the non-Muslim public as well.
Many thanks to JLH of Gates of Vienna for this prompt translation.