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Why non-Muslims are converting to sharia finance

economist.com

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Re: Why non-Muslims are converting to sharia finance

#21

Post by tareqak »

my_username_is_ wrote: post #10

Very interesting--I had never heard of this before. It seems the higher interest rate is predicated on finding investors who want to take loans at higher-than-market-clearing rates. Does anyone have any insight into why non-Muslims are getting loans through these banks? I don't see how this scales to consistently provide higher returns, especially as more money moves into this system. Are tobacco and alcohol related…

Maybe some non-Muslims don't want their money to go into arms, alcohol and tobacco? The Economist also forgot to mention gambling too.

Edit: there -> their

Re: Why non-Muslims are converting to sharia finance

#22

Post by TheSpiceIsLife »

mmjaa wrote: post #19

This is great. I'm not a Muslim, but learning that there are banks that don't invest in arms and tobacco - this is great news, and I guess I'll take a closer look at halal banking soon. For too long I've been bothered by the fact that I don't have much say in where my funds are invested by the 'normal banks' - the fact that there is an option for those of us who don't want to participate in the military-industrial-ph…

Hopefully, like high protein yogurt and paleo brownies, this will catch on and the larger institutions will offer options to their retail customers.

Re: Why non-Muslims are converting to sharia finance

#23

Post by stef25 »

tareqak wrote: post #11

I recognized person mentioned at the end of the article: Tarek El Diwany (same first name as me spelled differently) had a part in the "Four Horsemen" documentary ( https://youtu.be/5fbvquHSPJU?t=3479 ). I found an article about him in https://meic.cfainstitute.org/2012/03/21/islamic-finance-tar... .

The hypothesis that the war on terror (pointless as it may be) is actually driven by Western banks and the concept of intrest and that the solution lies in sharia banking laws is quite something to get your head around.

Re: Why non-Muslims are converting to sharia finance

#24

Post by TheSpiceIsLife »

my_username_is_ wrote: post #9
2muchcoffeeman wrote: post #5

Earlier quoted context omitted.

I’ve reached the limit too. What does modern banking have to do with religion?

The article says that Muslim financing tradition prevents banks from paying interest, and they must instead share their profits. In recent years this has been higher than the meager interest offered by banks' traditional savings accounts, so it is attracting non-Muslims at a growing rate. There is some debate as to whether all of these products technically fit the definition/custom--as some banks are advertising a ce…

Would it make sense for a retail customer of Big Bank Co. to also be a shareholder thus enabling them to share the profits?

Re: Why non-Muslims are converting to sharia finance

#25

Post by codeulike »

mmjaa wrote: post #19

This is great. I'm not a Muslim, but learning that there are banks that don't invest in arms and tobacco - this is great news, and I guess I'll take a closer look at halal banking soon. For too long I've been bothered by the fact that I don't have much say in where my funds are invested by the 'normal banks' - the fact that there is an option for those of us who don't want to participate in the military-industrial-ph…

See also Ethical Banking, here's a list of regular banks in the USA who dont lend to certain industries: https://www.nerdwallet.com/blog/banking/socially-responsible...

Maybe its not a very big thing in the USA. Ethical Banking is pretty big in the UK.

Re: Why non-Muslims are converting to sharia finance

#26

Post by codeulike »

TheSpiceIsLife wrote: post #22
mmjaa wrote: post #19

This is great. I'm not a Muslim, but learning that there are banks that don't invest in arms and tobacco - this is great news, and I guess I'll take a closer look at halal banking soon. For too long I've been bothered by the fact that I don't have much say in where my funds are invested by the 'normal banks' - the fact that there is an option for those of us who don't want to participate in the military-industrial-ph…

Hopefully, like high protein yogurt and paleo brownies, this will catch on and the larger institutions will offer options to their retail customers.

But it doesn't really make sense unless its organisation-wide

Re: Why non-Muslims are converting to sharia finance

#27

Post by homarp »

vmlinuz wrote: post #18
comesee wrote: post #14

Who wrote this article?

Common question here - standard Economist policy is never to name their writers and correspondents, except very very rarely. Their content is published under the name of the newspaper, not the individual author.

https://www.economist.com/the-economist-explains/2013/09/04/... explains why

Re: Why non-Muslims are converting to sharia finance

#30

Post by tareqak »

stef25 wrote: post #23
tareqak wrote: post #11

I recognized person mentioned at the end of the article: Tarek El Diwany (same first name as me spelled differently) had a part in the "Four Horsemen" documentary ( https://youtu.be/5fbvquHSPJU?t=3479 ). I found an article about him in https://meic.cfainstitute.org/2012/03/21/islamic-finance-tar... .

The hypothesis that the war on terror (pointless as it may be) is actually driven by Western banks and the concept of intrest and that the solution lies in sharia banking laws is quite something to get your head around.

El Diwany isn't saying that the solution is sharia banking in that part of the "Four Horsemen". Instead, he is rightfully calling out that there is a mismatch between public intentions and the actual incentives.
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