DAR AL HARB - CANADA: ISLAMIC FINANCE (SHAR'IAH COMPLIANT) IS FOR US, WE WANT TO BE GOOD DHIMMIS TOO ! ! !

Canada woos Islamic finance
by Duncan Mavin

The Hockey Hall of Fame may seem like an unlikely venue for tonight's gathering of some of the global leaders in Islamic banking and insurance services.

But the location was chosen because it is ideal to introduce foreign investors to Canada, say the organizers of the event from Ittihad Capital Corporation, a Canadian company specializing in Islam-compliant financial services.

"We are a proudly Canadian firm," said Ittihad president Suhail Ahmad. "We want the foreign investors to walk away and understand that Toronto is a place where they want to do business."

Islamic finance covers everything from the issuance of bonds to home loans. Products comply with shariah law, which means there must be no interest paid, and there must be no investment in pornography or alcohol, for example. Investments must also be relatively low-risk because gambling is not permitted.

The dinner at hockey's mecca is an offshoot of one of the biggest conferences on the burgeoning sector in North America. Hundreds of delegates from around the world are expected to descend on Toronto for three days this week to take part in Islamic Finance World.

The event's sponsors are hoping Canada will catch up with the rest of the world, where Islamic-compliant finance has already taken off. The industry size is currently estimated at more than US$400-billion, with projected growth of 15% a year.

London in particular is seen as a thriving centre for the sector -- not only do domestic U.K. banks offer a range of Islamcompliant products, but London is also the home to a multi-billion- dollar market in shariahcompliant bonds, known as the Sukuk market.

"The market has already matured in the U.K. , Europe, Southeast Asia and the Middle East," said Walied Soliman a lawyer at Ogilvy Renault LLP, one of the conference's main sponsors. "In those regions, the conferences are not about Islamic finance. They are about securitization of Islamic bonds, or securitization of car loan portfolios."

On the surface, shariah-compliant financial products differ little to some conventional products, said Omar Kalair, president of UM Financial Inc.

Shariah-compliant investment vehicles are similar to any other socially responsible investment. A shariah-compliant mortgage charges no interest but follows a rent-to-own agreement that has a very similar end result to a conventional mortgage.

"It's the same as kosher or halal meat," said Mr. Kalair. "It looks the same, it smells the same, but one is permissible to one faith group and one isn't."

Ittihad markets its products to non-Muslims and Muslims alike. The company recently arranged $10-million funding for a manufacturing facility for an environmentally conscious consumer product and an $18-million real-estate contract with no mortgage, both to non-muslims.

"The reason they selected Ittihad Capital is because they liked the business model," said Firaaz Azeez, executive vice-president at Ittihad.

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