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UK SMEs must keep Islamic finance separate

Dec 21 2007

Conventional UK financial services and Islamic finance cannot be fully integrated by SMEs, claim financial experts.

The Chartered Institute of Management Accountants (CIMA) says the two must operate 'side by side'.

The finance industry is built upon the principles of risk and uncertainty, two factors which are prohibited under Muslim Shari'ah law.

John Willsdon, learning and development specialist for the CIMA, says: 'From an Islamic perspective the Islamic products and services would be 'tainted' by the operations of the conventional side of the business.'

UK institutions may offer Islamic products and services but they are offered through Islamic 'windows' or subsidiaries whose activities are kept separate from their conventional counterparts.

In November the Financial Services Authority estimated Islamic finance to be worth about £250 billion globally, with a conservative estimate of 10-15 per cent growth per annum.

Earlier this month CIMA became the first chartered accountancy body to offer a global qualification in Islamic finance.

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