You are here: Home - Saving & Banking -

Almost half of Muslims have never used Islamic finance

Written by: Emma Lunn
Nearly half (46 per cent) of Muslim consumers have never used Shariah-compliant financial products, according to Gatehouse Bank.

The bank said the figure – which rises to 53 per cent among Muslim women – underlines the challenge faced by Shariah-compliant finance providers.

Gatehouse’s Islamic Finance Consumer Report also found that seven in 10 (71 per cent) Muslim consumers believe that Islamic finance is dedicated to the interests of the community, while 61 per cent believe it works hard to better serve its customers.

An impressive 85 per cent of existing Islamic finance consumers said their experience with Islamic finance exceeded their expectations.

What is Islamic finance?

Islamic finance is a financial system that operates according to Islamic or Shariah law. Earning interest is not allowed – whether you are an individual or a bank. To comply with these rules, interest is not paid on Islamic savings or current accounts, or charged on Islamic mortgages.

Instead, savers earn a share of expected profits while mortgage borrowers lease their property from the bank and pay for it in instalments.

A report in April by Moneyfacts found that Islamic banks are increasingly occupying the top spots in the savings account tables, particularly in the one and two-year fixed bond sectors.

Barriers to adoption

Gatehouse claims its 2019 Islamic Finance Consumer Report is the first study of its kind to unpick the barriers and drivers to adoption of Shariah-compliant products by Muslim consumers in Britain.

A key recommendation of the report is that the industry better communicates what makes its products Shariah-compliant, after finding that more than three-fifths (61 per cent) of consumers were sceptical about how Islamic the products really are.

Gatehouse said awareness and perception of Islamic finance among non-users of Islamic products is one of the industry’s biggest obstacles to overcome, with only 53 per cent of non-users knowing anything about it, and only 35 per cent of non-users viewing it favourably.

The study also found that, while 71 per cent of people surveyed thought that Islamic finance was trustworthy and ethical, some 60 per cent found it difficult to purchase, and 62 per cent thought it was hard to compare options.

Charles Haresnape, CEO of Gatehouse Bank, said: “Our report highlights that providers of Shariah-compliant finance are missing out because of a largely untapped market for their products.

“If nearly half of all Muslim consumers have never used Islamic finance that means hundreds of thousands of potential customers are waiting to be reached. A key lesson is that we and the whole industry need to do a better job of reaching out to the Muslim community and explaining the benefits of Shariah-compliant products.

“Most importantly, the research shows we need happy customers and faith leaders to become community advocates for Islamic finance because word-of-mouth is highly valued among Muslim consumers.”

Related Posts

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Brits are getting better at saving and budgeting

UK workers don’t blow the budget straight after payday like they used to, according to Portafina.