Islamic finance: firms seeking a slice of the growing Muslim market would be well advised to learn its complexities inside out, writes John Willsdon--which is where the CIMA certificate in Islamic finance comes in.

Author:Willsdon, John
Position:Technical matters - Chartered Institute of Management Accountants Centre of Excellence
 
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The Islamic finance industry may be new to many CIMA members, but this established niche market is set for an exponential expansion over the next few years. It's thought to be worth between 150bn [pounds sterling] and 250bn [pounds sterling], compared with 100bn [pounds sterling] two years ago, and its current annual growth rate is estimated at between 15 per cent and 20 per cent.

Despite the increasing importance of Islamic finance, its complexities are not widely understood, few institutions offer courses in it and there is no global qualification. This is why CIMA, through its Centre of Excellence, has aligned itself with the International Institute of Islamic Finance to develop a certificate course. By doing so, it will be the first professional body to offer such a qualification.

The CIMA certificate in Islamic finance comprises four modules: Islamic commercial law; Islamic banking and takaful (insurance); Islamic capital markets and instruments; and accounting and analysis of Islamic financial institutions. It will be available internationally and will be assessed electronically. It is aimed at a diverse range of participants, including employers and employees currently operating in the sector and those wishing to move into it. A diploma-level qualification--international Islamic finance: governance and analysis--will be available at a later date. This will be a written exam based on case studies.

It's estimated that 15 per cent of the institute's membership is employed in the finance industry. The most rapid growth in Islamic finance has been in banking--both in Islamic banks and in conventional banks with "Islamic windows". The Islamic capital market has also seen a surge in activity, with a variety of multi-million-pound bonds (sukuks) hitting the headlines. Sukuks are seen as an important way for the Islamic finance market to meet the funding requirements of both the Middle East and South East Asia, which are estimated at 250bn [pounds sterling] and 500bn [pounds sterling] respectively over the next five years. The growth in demand from these two regions has resulted from two factors:

* The massive accumulation of assets in banks operating in the predominately Islamic countries that have benefited from the extraction of energy reserves. The most obvious examples are the Gulf states, along with Brunei, Malaysia and Indonesia.

* A reaction to western financial practices throughout the Muslim world and a move towards comparative practices that adhere to Islamic law (sharia).

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It's estimated that there are between 1.5 billion and 1.8...

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