Business | Banking

Dubai to export Islamic finance to Europe

Two successful trade missions carried out

  • By Babu Das Augustine, Deputy Business Editor
  • Published: 00:00 January 31, 2011
  • Gulf News

Dubai: Dubai's financial services industry is fast emerging as a leading catalyst in the development of Islamic finance products and services to Europe, according to officials from Dubai Exports, an agency within Dubai Department of Economic Development.

"The expertise of Dubai in the area of Islamic financial services is something that we hope to capitalise through our export facilitation services" said Engineer Saeed Al Awadi, the CEO of Dubai Exports.

"We have carried out two very successful trade missions in Islamic financial services which have linked our firms with opportunities in foreign markets."

Al Awadi hopes to export Dubai's expertise in Islamic finance to various parts of the world with the help of some of the specialised home grown financial institutions and financial clusters in the UAE.

Pioneer

The financial innovation has been greatly assisted by financial centres and their regulators who have understood the importance of the sector and its unique structure. In this respect Dubai has become the leader and pioneer with the first recognised Islamic bank being established in the country, the first Islamic stock exchange and not only does it have the greatest number of listed Islamic bonds or sukuks, but also the largest ever sukuk issued.

Business clusters such as the Dubai International Financial Centre (DIFC) have been a catalyst for the development of diverse range Sharia compliant products. The centre has allowed a number of Sharia compliant firms to develop their products and services. In terms of regulation, Dubai, through the Dubai Financial Services Authority, has developed advanced level of regulation to supervise the firms within the DIFC.

Currently, global Islamic financial assets stand at approximately $800 billion (Dh2.93 trillion), growing approximately 10 per cent per annum from the mid 1990s when they were about $150 billion. Industry experts claim that over the next decade the sector may reach $4 trillion.

The growth of Islamic financial services has been driven by a growing Islamic population that is enjoying a rapid rise in purchasing power, due to better education and employment opportunities.

Dubai Exports recently held a seminar to highlight Islamic Financial Opportunities in Germany and France. Speaking at the forum financial and legal experts said these two economies in the Eurozone have huge potential for Islamic Finance.

Real estate

"Germany has a Muslim population of approximately 4.3 million of which 1.9 million are German citizens. Islamic transactions growing despite lack of government involvement — especially real estate and capital markets sector," said Jody Waugh Partner — Banking Department.

German Muslims hold wealth of up to €25 billion (Dh124.95 billion). This potential is further bolstered by a significant rate of saving in Muslim households, which at 18 per cent is nearly double the national average.

"More than 70 per cent of Muslims in Germany responded in a survey last year that they are interested in Islamic Finance products, and of these nearly 60 per cent of respondents would consider availing of such services if offered by an existing German bank," said Dr Kilian Bälz, Partner Amereller Legal Consultants.

Financial experts speaking at the seminar organised by Dubai Export said, long experience of Dubai in Islamic finance makes it a ideal partner in Islamic Financial services ventures in Europe.

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