Research by our Business School recognises the importance of Islamic Finance’s contribution to economic development and the role it can play in sustainable development.
Led by Professor Habib Ahmed, Sharjah Chair in Islamic Law & Finance, this resulted in the production of policy working papers and recommendations that have been used to inform the draft Islamic finance policy.
Islamic banking industry
His research identifies ways in which Islamic finance can contribute to the achievement of the United Nations (UN) Sustainable Development Goals (SDGs) and has helped develop recommendations for a Shariah governance framework and liquidity infrastructure for the Islamic banking industry.
The research found that tackling poverty, a key SDG, requires going beyond raising income levels to include other aspects such as providing education and health services. Different organisational formats of Islamic financial institutions and provision of various types of financial services can affect performance in terms of outreach and impact on poorer households including financially excluded people.
Financial infrastructure improvements were identified such as enhancing/strengthening Shariah governance framework, design, management and operation of systems, policies, public debt and reserves (liquidity infrastructure) for Islamic banks and consumer protection.
Professor Ahmed’s research impacted Islamic banks, regulators and international policy makers with papers informing high-level discussions about the role of Islamic finance in delivering the SDGs as well as leading changes in practice and regulation.
His work has also informed policies for strengthening Islamic Financial Architecture including policy recommendations being adopted by the Standing Committee for Economic & Commercial Cooperation of the Organisation of Islamic Cooperation (COMCEC) as reference guidelines for 57 Organisation of Islamic Cooperation countries.
The research has also contributed to initiating the creation of a central Shariah board in Turkey and developing the liquidity related instruments in AlBaraka Bank in the country. These instruments are to ensure enough liquid assets can be turned into cash if needed, ie to mitigate the risk of a liquidity crisis, which could lead to bankruptcy.
Find out more
Read Professor Ahmed’s full Impact article ‘Islamic Capital Markets and Sustainable Development’.