Local firm first to raise money from Islamic bond
(19 August 2010)
A TYNESIDE firm has become the first in the country to raise money from an Islamic bond in a move which could herald more firms across the UK taking advantage of untapped funds in Asia and the Middle East.
Professor Habib Ahmed, Sharjah chair in Islamic law and finance at Durham University's Institute of Middle Eastern and Islamic Studies, said that the investment certificates would be useful for UK companies finding bank finance hard to come by.
He said: "Given the credit market is very tight, people are looking for alternatives. There are some investors in the Muslim world that would like to invest using Islamic forms of financing. I have a feeling it's an option that will now open up for a lot of UK and European firms.
"One of the requirements of Islamic financing is that it should not be used to fund actions which are not considered ethical, so companies that deal with such things as gambling, alcohol and pork will not be able to get finance under Shariah restrictions. But it can otherwise be used for investment in a wide variety of industries."