DAR AL HARB - U.K.: A FRESH TAKE ON ISLAMIC FINANCE

A Fresh Take on Islamic Finance
As financial institutions based on Islamic law proliferate, some B-schools are taking notice. But this is one case where demand exceeds supply
by Francesca Di Meglio

Any MBA student is going to have a strong grounding in the vocabulary of finance, including interest rates and lending. But some schools are now adding programs and courses that are teaching a new vocabulary for an increasingly visible sector of the financial world—Islamic banks that conduct business according to the tenets of Islamic law.
One of the latest schools to take an interest in Islamic banking is the Cass Business School, part of the City University, London, which in the fall is launching an Executive MBA based in Dubai featuring specializations in Islamic finance, energy and general management, and finance. The school says there's a need for more MBAs with experience in the area.
The number of schools offering Islamic finance programs is still relatively small—and at some universities, relevant courses can be found outside the confines of the business programs. But experts say that, at the very least, business students should know something about this expanding industry. "Anyone who seeks to work in the Islamic world should be interested in this area, because it's booming," says Ibrahim Warde, author of the soon-to-be-updated Islamic Finance and the Global Economy (Edinburgh University Press, 2000). "Understanding Islamic finance is highly valued in the marketplace."

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Rising Interest

Harvard has also been researching Islamic finance for some time. In 1995, the university launched the Harvard Islamic Finance Project (IFP), a group that studies and analyzes the growth of Islamic finance. The project brings together faculty and students from the law, divinity, and business schools, among others. Interested students at Harvard Business School can take advantage of relevant seminars, conferences, and networking opportunities planned by the project group. They also participate in the selection of papers that are published after being introduced at a conference regularly organized by the IFP.

S. Nazim Ali, director of the Islamic Finance Project, says he has noticed an increased demand for information on the topic among both faculty and students. At Harvard, there are 19 examples of relevant theses, dissertations, and research projects on Islamic finance. And six case studies on the growing sector are available through the B-school. Ali also confirms that he's getting more inquiries from other schools about how to approach research and teach this subject to students of various disciplines.

Still, even Harvard is without an actual Islamic finance course. But some HBS and John F. Kennedy School of Government students head to Tufts University's Fletcher School of Law & Diplomacy. There, Warde, also a Fletcher adjunct professor, teaches "Islamic Banking & Finance," which provides an overview of the industry's history, the range of financial products available today, and matters of politics and the possibility of terrorist financing. Warde also teaches a course that exposes students to the Arabic language, with a particular emphasis on Islamic finance vocabulary and oral and written communication.

Student interest in the "Islamic Banking & Finance" course has skyrocketed since Warde first started teaching it. When the course kicked off three years ago, 10 students signed up. Now, almost 40 students are enrolled. Business opportunities are going to keep coming in the world of Islamic finance for at least a few more years, says Warde. For the moment, though, MBAs will have to educate themselves about the field by traveling outside their comfort zone—and maybe even beyond the walls of their B-school.


Pertinent Links:

1) A Fresh Take on Islamic Finance