WHAT ARE THE OBSTACLES HINDERING GENUINE ISLAMIC FINANCE PRODUCTS IN THE GLOBAL MODERN MARKET? A UK CASE STUDY

Abstract

This evaluation of UK Islamic finance products examined laws, contracts, marketing material, and documented discussions with Islamic investment agents. Identifying key areas of non-compliance and the reasons for compromise, the study observed several obstacles to stakeholders adopting genuine Shari’ah compliant products. The objectives of profit-seeking Islamic banks are fundamentally unaligned with Islamic macro-economics. National laws, market competition, and consumer taste for lower risk investments exerts pressure on providers to adopt contractual clauses that ultimately lead to breaches of Shari’ah. A lack of transparency is characteristic of the vague verdicts by bank-backed Shari’ah boards. Coupled with a lack of Islamic knowledge among agents and consumers, the market further facilitated non-compliance. Scholarly criticisms are obscured from most consumers due to a lack of patronage and the difficulty in navigating financial and Islamic jargon. Genuine Shari’ah products are not difficult to implement, but without legal enforcement, they face a hostile marketplace as unethical finance tends to be far more profitable to super-rich banks at the expense of more vulnerable consumers.