Practical financial education is often lacking among the young and this perpetuates a problem well into adulthood. The average Muslim is not exactly going to school and learning about Islamic finance. They learn about that at home.
Unfortunately, these insights are very superficial. Their parents probably tell them that interest is not Halal. Other than that, they probably don’t understand the fact that their pension or superannuation needs to be compliant. Or that for Muslims, investments and all finances need to be compliant too.
Seeing this issue, the Hejaz Group makes it easy to achieve Shariah compliance for financial needs. We have financing solutions for everyday moms and dads who want to buy a vehicle or a home. All the way through to large developers to commercial property and business financing.
Our comprehensive financial services offerings cater to both the retail and wholesale sophisticated investor segments. We have retail funds, ETFs (exchange traded funds) for the retail audience. We have wholesale funds that cater for more sophisticated high net worth and complex clients.
We cater for senior clients with a very well-established financial position to young first-time investors and homebuyers and everyone in between. We build our products, services and offerings around educating, informing and engaging at a grassroots level.
The focus is to build that foundational understanding of Islamic finance, how it works and how we’re different from conventional. Blending between ETFs, mutual funds and pension products.
We are not reselling or rebadging anybody else’s products and services. It’s all our own, end to end. That gives the consumer a lot of confidence about who we are and what we do.
These robust and comprehensive solutions take a lot of effort and endeavor to build. We’re trying to find that balance between Shariah compliance and regulatory compliance because we don’t want our customers to in any way be disadvantaged.
Fortunately, Australian regulators have always been very friendly and accommodating towards Islamic finance. They have been very understanding of the need for inclusivity and giving everybody the opportunity to engage with financial services that meet their requirements.
Our customer base is becoming diversified, about 5% are non-Muslims and they come to us because our investments are aligned with their ethical and moral philosophies. They don’t want to be funding things which are socially injurious. Shariah has strict guidelines on this aspect and that’s what they prefer.
But going beyond Australia, we need to have a framework across countries that sets standards clearly how Islamic financial institutions need to behave to ensure products are Shariah compliant. These prescriptions should not just be at face value but evident even after lifting the veil.
For widespread acceptance AAOIFI and the Islamic Financial Services Board need to set the standards such that there is no need for a customer with low financial literacy or even time and motivation to check for Shariah compliance.
We have also seen the rise globally in ESG and socially responsible investing. Australia is one of the leading economies from that perspective and having common Shariah standards should align very well with such an investment focus.
Muzzammil Dhedhy is co-founder and executive director of Hejaz Group, Australia
