Speaking at the Reuters Islamic Finance Summit today, Dar highlighted the development of an upcoming F&C fund that will meet both ethical and Shariah investing criteria, and can be sold to both Muslims and non-Muslims. "I see this as the way forward in markets such as Malaysia, where a significant proportion of the population is non-Muslim," he said, adding that once such products have established a track record, it should appeal to a broader audience, and encourage other launches.
Marrying the Western and Islamic traditions of investing could help Shariah surmount a number of hurdles that have so far limited its appeal. A recent Oliver Wyman survey found that only half of the 1.4 billion Muslims worldwide would opt for Islamic finance if given a competitive alternative to conventional products. Dar said he had conducted his own survey which found that no more than 25 percent of UK Muslims was interested in Islamic banking and finance. "The vast majority prefer competitive quotes from non-Shariah providers," he said - this is particularly the case in the mortgage sector.
In other countries he said the problem is twofold. Where Arabic is not the dominant language, the severity of the prohibition on earning interest on financial products is not recognised by the majority of Muslims. In other countries it is a question of poverty: "This technicality is not relevant to their thinking," he said.
Despite this, he was optimistic about the prospects for growth in the next decade: "By 2020, Islamic financial products will account for 40 percent of the total in the top six Islamic finance markets," he said. These markets include Saudi Arabia, Malaysia, Bahrain and Kuwait.