Islamic Finance & Islamic Banking MBA

Muslim countries are poor.

The very first thing you will see if you take a look at Muslim countries is that; “Muslim countries are poor.”

But, it is growing. GDP of OIC (Organisation of Islamic Conference) is growing at the rate of 5 percent a year. For example, total GDP of Muslim countries constituted %6.81 of World GPD in 2012 but this number rose to %8.3 in 2013.

There are 57 countries on the World considered to be Muslim countries and all of them are the members of OIC.

The total population of Muslim countries is 1.47 billion and this number constituties %22.8 of total World population. Total GDP of these countries is $5.7 Trillion, equals to %8.3 of World GDP.

Also, total export of Muslim countries makes up %13.47 of total World export, which is very low considering many of them exporting oil and gas.

Average GDP per capita in Muslim countries is 3.019 USD; which is again, very low.

It is easy to see that even if they constitute almost the quarter of World population; their economic indicators are very poor looking considering that great amount of population.

Muslim countries are classified as;

Low Income Country : 26

Middle Income Country : 25

High Income Country : 6

Top 10 Muslim Countries by Population

1- ) Indonesia ( 238 Millions )

2- ) Pakistan ( 181 Millions )

3- ) Nigeria ( 167 Millions )

4- ) Bangladesh ( 153 Millions )

5- ) Egypt ( 83 Millions )

6- ) Iran ( 76 Millions )

7- ) Turkey ( 75 Millions )

8- ) Algeria ( 37 Millions )

9- ) Morocco ( 33 Millions )

10- ) Iraq ( 32 Millions )

Top 10 Muslim Countries by GDP

1- ) Indonesia ( 1.21 Billion USD)

2- ) Turkey ( 1.12 Billion USD)

3- ) Iran ( 1 Billion USD)

4- ) Pakistan ( 475 Million USD )

5- ) Saudi Arabia ( 446 Million USD )

6- ) Malaysia ( 357 Million USD )

7- ) Bangladesh ( 330 Million USD )

8- ) Egypt ( 304 Million USD )

9- ) Algeria ( 288 Million USD )

10- ) Nigeria ( 175 Million USD )

Top 10 Muslim Countries by GDP per capita

1- ) Qatar ( 122 Thousand USD )

2- ) UAE ( 57 Thousand USD )

3- ) Brunei ( 51 Thousand USD )

4- ) Kuwait ( 48 Thousand USD )

5- ) Bahrain ( 35 Thousand USD )

6- ) Saudi Arabia ( 24 Thousand USD )

7- ) Oman ( 23 Thousand USD )

8- ) Turkey ( 17.5 Thousand USD )

9- ) Libya ( 16 Thousand USD )

10- ) Gabon ( 15 Thousand USD )

Sources : OIC, COMCEC, Sesrtcic, Islamic Development Bank, CIA Factbook

----

Canadian University of Dubai - MBA in Islamic Banking

EUCLID - MBA in Islamic Finance

---

Source: https://www.islamiceconomics.net/

MBA in Islamic Economics

According to islamic methodology, there are three main sources of study. Five senses (havas-ı selime), mind and faithful (true) news. Five senses make us recognize material properties of things. Mind produces knowledge in the ways of perception, experience, inference (induction, deduction, analogy). This knowledge is of human. Source of true news is the Quran and sunnah. That is the knowledge which Allah (May His Glory be Exalted!) delivered in the way of revelation by means of prophets. The type of revelation reserved for other people out of prophets(saints) is called “inspiration” that is accepted as a subjective knowledge source.The results reached by mind in the light of principles drawn by revelation will provide us equipments on the subject of methods and sources of islamic economy.

Universal knowledge which obtained by five senses is limited by relativity of universe. In fact, in a whole life, we can understand a very limited area. For the Hereafter, there are positive and negative believes. “They know but the outer (things) in the life of this world: but of the end of things they are heedless./ do they not reflect in their own minds? Not but for just ends and for a term appointed, Did Allah (M.H.G.E.) create the heavens and the Earth,and all between them: yet are there truely many among men who deny the meeting with their Lord (M.H.G.E.) (At the Resurrection!).” (Rum, 30/7-8)

Methodology we use when islamic economy is examined is mainly based on principles derived from perception. Matters out of this, change according to time and place. Matters have been acted once, make experience potential and they help us seek solutions problems today without bonding us. Islam, on one hand, put forward to becoming experienced of indivudials, and having moral and virtues with a political approach; on the other hand, it targets to act peaceful world by giving them to service of congregation. It encourages to help one another, to love each other in sake of Allah (M.H.G.E.), without any return. It bonds law principles which it established to these virtues which are source of peace and found deep inside human souls. On the other hand, to rescue soul from pressure of material, it establishes main rules which will organise economical life. As it gives assurance to all these with a powerful state; it determines secondary rules changing according to time and place, besides main principles with legal institutions like interpretation, comparison, concurrence, approval, usage and custom.

These sources are sources of canonical law , as well. Canonical law means understandig as a word. Its terminological meaning is in second plan. Therefore, the thing we have to do first is to try to understand İslam. We can examine “islamic economy” in the entire Islam, in this way only.

----

Canadian University of Dubai - MBA in Islamic Banking


EUCLID - MBA in Islamic Finance

---

Source: https://www.islamiceconomics.net/

MBA in Islamic Finance & Islamic Banking

Islamic banking is an extending sector in the Saudi Arabia banking industry.  It is a system of banking, agreeing  with the principles of Islamic law (Shari’ah).  It forbids usury, the collecting  and charging  of interest and trading in financial risk.  The Kingdom of Saudi Arabia is the largest actor  in terms of pool of funds in the international  Islamic finance market.  Saudi Arabia appeared as the largest market for Islamic banking in the GCC, with a total resource  of fully-equipped Islamic banks reckoning for nearly  27.4 % of the district’s  total Islamic banking.

Sukuk (Islamic bonds) are getting favor in Saudi Arabia because of their risk-free quality  and are awaited to prosper  further in the future.  Even in recessionary times, Sukuk produced firmness  to Saudi banking sector.  Some of the vital  factors behind the development of the Islamic banking in the area  are strong government involvement, growing demand for Islamic products, and the access  of innumerable  new actors among others.

The current  report, titled as  “Saudi Arabia Banking Sector Outlook 2015”, spread across 60 pages examines the macroeconomic factors crucial to the banking industry  together  with their effect on the sector.  The report also identifies vital  players in the market and comprises their detailed  trade  characterization.  Moreover, historical analysis of their accomplishments  is also undertaken on the base of key financial proportions.  Substructural development of ATMs, POS terminals, and branches of top 10 banks is thoroughly been covered.  Besides, the report sheds light on the appearing industry trends, which are awaited to decide the future of the Kingdom’s banking sector.  Estimate  for key banking elements, such as loans, deposits etc. have been also introduced  in the report to empower  a better concept  of the Saudi Arabian banking industry.

---

Canadian University of Dubai - MBA in Islamic Banking


EUCLID - MBA in Islamic Finance

---

Source: https://www.islamiceconomics.net/

Islamic Economics MBA

“Islamic Economics” is a term often referred to as a sub – branch of Islamic jurisprudence; fiqh in Arabic. The term of Islamic Economics literally translated from Arabic word “al iktisat’ul Islam, or rarely “al fiqh’ul Iktisat.”

To give a more professional definition; referring Umar Chapra; ” that branch of knowledge which helps to realize human well – being through an allocation and distribution of scarce resources that is in conformity with Islamic teachings without unduly curbing individual freedom or creating continued macroeconomic and ecological imbalances.” Also according to Chapra and many other Scholars; there are 4 sources of Islamic systems; they are;

1-) Quran, such a divine sources
2-) Sunnah, the sayings and practices of the Prophet Mohammed (pbuh)
3-) Ijma, the common belief of Muslim scholars
4-) Qiyas, the other principles that are compared to those three sources.


These resources are widely accepted as the main sources of Islamic sciences. We will break down each and every one of them later on InshAllah.

***

Islam, a religion born in a territory where the agricultural potential is limited but commercial possibilities were great; such as trade and tourism. Prophet Mohammed (pbuh) himself had been a merchant; and very successful businessman actually; so We can see that Islam always regarded merchants with honor and esteem. Along with Prophet (pbuh); many of His Sahabah were also merchants; Abu Bakr, Usman and many others were successful merchants.

After the death of Prophet (pbuh); Muslims continued that tradition of successful trade. Many of that era Scholars were successful merchants as well, like Abu Hanifa. They faciliated in a really wide location; between Mediterrenian an China. It is an interesting point that people of those countries like Malaysia and Indonesia were converted to Islam not without war but with the efforts of that brilliant Muslim merchants like Abu Hanifa.

During the Middle Ages, with that remarkable success in making converts; Muslims were started to seen as world’s leaders in business, science, medicine and philosophical thought. Many ancient Greek authors are known to us today only through Arabic translations. Modern mathematics is based on the Arabic system of notation, and algebra was an Arab invention. During the intellectual revival of Western Europe in the eleventh and twelfth centuries many Christian scholars went to Cordoba and other Muslim intellectual centers to study classical philosophy and science. The word of “college” was derived from Arabic word of “külliye”; and the oldest college of English speaking Europe, the Oxford College was founded as a copy of those “külliye” system. At the same time, Christian merchants learned Muslim commercial practices and techniques. As a matter of fact, the word of “cheque” (literally means a printed form, used instead of printed money) was invented by Muslim merchants of that time; and its original Arabic word was “şakk”. Many other advanced finance techniques were also being used during that time period.

In short; it can be clearly seen that Islamic economic system of that time is very close to today’s free market and so – called capitalism or liberal economy. However; Islam has two main and very important differences when compared to those other economic systems. Islamic Economics is based on “prohibition of interest” (usury or riba in Arabic) and “presence of zakat (almsgiving)”. Those two point can be regarded as indispensible points of Islamic economics. “Prohibition of interest” and obligatory alsmgiving could be sounded like somewhat socialism, but; it’s not. Islamic economics is so much different than capitalism and socialism. However, I think it should be a good implication that “dynamism of capitalism” and “equality of socialism” are combined in the economics system of Islam. Moreover, it embraces both this and other world as a whole; directed to obtain both worlds

---

Canadian University of Dubai - MBA in Islamic Banking

EUCLID - MBA in Islamic Finance

---

Source: https://www.islamiceconomics.net/