The journey is the destination

People who know me tend to think I am an oddball. For instance, I am a Muslim, but I studied in a catholic school. I would rather play rugby than soccer even though I live in football-crazy Singapore, where almost every guy supports at least one English premier league club. For your information, I support Liverpool. When everyone wanted to enter the banking industry after graduation, I saw a good opportunity in insurance. So, when I told people I intended to focus on Islamic finance, eyebrows were raised. Not one, but quite a few actually.

Well, I am not surprised, and neither do I blame them. Who else knows of another Singaporean doing Islamic finance? Most probably no one. Well, I do, and I can tell you the number is so small, I can use my fingers to count them. Even though there are two banks offering retail Islamic banking services in Singapore, not many people want to open such an account. Some do not even trust such accounts.

How then did I get hooked on Islamic finance?

Part of it might be due to my curiosity. Maybe, God had something to do with it. One thing led to another, and here I am, writing on Islamic finance for CPI Financial. By the way, I am also pursuing the ‘Chartered Islamic Finance Professional’ qualification from Malaysia-based Inceif.

Conventional banking and finance may be all the rage in Singapore, but I truly believe that Islamic finance is going to boom globally soon, and I want to be in the thick of things when it happens. This is one of the reasons why I left sunny Singapore for even sunnier Dubai.

In February, Moody’s said the Islamic finance industry was estimated to be worth $700 billion globally, and was showing no signs of slowing. Sukuk is the fastest growing segment of the market, and has seen phenomenal growth in the past six years. By 2007, global volumes had reached $97.3 billion, with the majority coming from Malaysia and the Arabian Gulf.

In the EMEA and Asia regions, overall issuance of Sukuk increased by 71 per cent to $32.6 billion in 2007 compared to 2006. The number of Sukuk transactions rose to 119 from 109 in 2006, while the average deal size increased to $269.8 million from $175 million. The largest proportion of Sukuk was issued in the financial services sector, accounting for 31 per cent of total volume, followed by real estate with 25 per cent, and power and utilities with 12 per cent.

Even the Takaful industry is showing great promise. The industry is expected to grow by about 13 per cent yearly until 2015, with Takaful premiums expected to reach $7 billion. Indonesia is fast developing its Takaful market, while Thailand has started introducing Takaful to cater to the needs of its predominantly Muslim south.

As always, not everyone shares the same enthusiasm as I do. I even know of some parties who think that Islamic finance is just a fad, while Takaful is just another way to sell insurance. However, regardless of what they say, I firmly believe that Islamic finance has a great future, and I will stand by it.

Mohamed Hairul Borhan
+971 4 3913724

Mohamed Hairul Borhan graduated from Nanyang Technological University with a degree in business specialising in marketing. He started his career as a financial adviser before embarking on a journalistic career with a trade publication focusing on the MENA insurance industry, writing specifically for its Takaful desk. In addition to holding various insurance certifications from the Singapore College of Insurance, he also has a Takaful accredition from HSBC Insurance Singapore.