Islamic Finance Educational Offerings In The UK: Developments And Reflections
Being one of the leading financial hubs in the world, London has always been an attractive centre for financial investment by wealthy capital owners from the Muslim world
Great Britain has emerged as an important centre for Islamic finance activity by providing an opportunity space for the flourishing of the sector through explicitly stated political willingness. While the assets size of the Islamic finance sector is limited in the country, the diversity of activities marks it as an essential hub in the western part of the world. There are currently five Islamic banks in the GB, one of which is only a retail bank. However, several high street conventional banks have offered various Islamic banking services, including Shari'ah-compliant home financing. However, the performance and take-up of Islamic retail bank, established in 2004, has not reached its potential compared to the size of the Muslim community in the GB. Being one of the leading financial hubs in the world, London has always been an attractive centre for financial investment by wealthy capital owners from the Muslim world. Due to the increased Islamic finance offerings in the world, the demand by these capital owners to invest their funds in a Shari'ah-compliant manner has increased, which is facilitated by London's flexible and welcoming financial sector. Hence, London is an essential Shari'ah-compliant fund management centre alongside strongly emerging as an Islamic fintech centre. In addition, the trust in and flexibility of the British legal system marks London as a sustained centre for legal disputes in the Islamic finance sector.
Coupled with such developments in the financial markets, since the mid-1980s, we have witnessed the emergence of Islamic economics, banking and finance related educational and research activities in the UK universities and institutions. For example, the Islamic Foundation and later with its educational wing Markfield Institute of Higher Education has played a foundational role in such academic events and training sessions. Led by one of the founding fathers of Islamic economics,
The trust in and flexibility of the British legal system marks London as a sustained centre for legal disputes in the Islamic finance sect
Professor Khurshid Ahmad, Islamic Foundation was the primary centre for publication and training until recent times and later master programme offerings at the MIHE. We owe to the Islamic Foundation for the publication of the seminal works in Islamic economics and finance and train the new generation of academics and professionals. Islamic Foundation also played an essential role in convincing the Bank of England to consider Islamic banking offerings in the UK, as I do recall Sir Eddy George, who was then the Governor of Bank of England, was present at a closed conference in 1994 with several leading Islamic economists and bankers including a couple of governors of central banks from the Muslim world.
The efforts of the Islamic Foundation led to the establishment of the first Islamic finance master programme at neighbouring Loughborough University in the second half of the 1990s under the leadership of Professor John Presley, who was involved in research in Islamic economics and finance for some years by then. The programme continued until 2002, when MIHE was established and started offering Islamic finance master programmes. However, Professor Presley continued researching Islamic finance and supervising PhDs in the field. As for MIHE, after its initial promising years, due to the institutional constraints and the impact of larger environment along with specialised staff leaving, it has lost the momentum and has become a peripheral institution with small Islamic finance master offering.
London is an essential Shari'ahcompliant fund management centre alongside strongly emerging as an Islamic fintech centre
The second mainstream institutional emergence was at Durham University, as Professor Rodney Wilson was involved in research and publications in Middle East economies, including Islamic economics and finance, since the mid-1980s. In 1998, Professor Wilson established a master programme in Islamic economics and finance with a political economy and development orientation. Unfortunately, similar to the experience of Loughborough University, that experiment in the master programme could not survive long and came to an end in 2002. However, as part of Durham programme, Professor Wilson continued to teach, research, publish, and train and advise professional institutions on Islamic banking and finance until his retirement from Durham in 2013 and later from INCEIF (Malaysia) in 2018. After his retirement, he continued to be active in Islamic finance related academic activities, who supervised many PhDs in Islamic finance at Durham since the early 1980s.
It should be noted that Durham University emerged as a significant global centre for Islamic economics, finance and banking related education and academic activities from 2005 onward with the expansion of faculty members, including my move from MIHE to Durham University in 2005. This has led to the reinstating of the master programme in 2009 with entirely new contents, establishing a specialised Islamic finance PhD programme in 2011. Islamic economics and finance PhD studies were primarily conducted under economics and the Middle East studies until then. Durham Islamic Finance Programme was re-institutionalised as Durham Centre for Islamic Economics and Finance (DCIEF) in 2012, which graduated many PhDs and master students who are making a change in academia and professional life. In addition, Durham has been hosting many regular research events, conferences, workshops and its famous Durham Islamic Finance Summer School since 2006. Thus, the diversity of events and offerings have enriched the student experience, which marks the distinguishing nature of DCIEF compared to other programmes. It should be noted that Durham has recently terminated its residential master programme to move to an onlinebased Islamic finance master programme. With all these efforts and activism, DCIEF has become known as 'substantivisit school' in Islamic economics and finance due to its particular approach by, methodologically, identifying substance over form.
Among other experiments, Aston University's shortlived (three years) Islamic finance master programme in the early years of the last decade should be mentioned. Similarly, a joint master programme at Reading University with INCEIF (Malaysia) in the first half of the last decade should be noted as a short-lived experience. As another small programme, Salford University's experiment with the Islamic finance master programme should also be mentioned, which closed down after about five years in the last decade due to specialised staff leaving the university. On the other hand, Bangor University's small master programme managed to survive for many years.
Recently, Dundee University, in collaboration with Al- Maktoum College (Dundee), has emerged as a new centre for a master programme in Islamic finance. Due to the academic and financial contribution made by the Al- Maktoum college, the business model is working well as Dundee University does face any financial resource imoplications and this collaboration will sustain the Islamic finance master programme. In addition, they have recently launched an Islamic finance PhD programme, which will substantiate their position. By further developing their research front through academic events and training activities, the Dundee programme can be a prominent player in the field. Birmingham City University has also recently launched its undergraduate and master's degree in Islamic finance. Lastly, in recent years, the Centre for Islamic Finance at Bolton University has emerged for Islamic finance-related PhD offerings by attracting many students from overseas countries. Beyond such institutional offerings, academics in many universities have developed elective modules in Islamic finance-related subject areas at the undergraduate and post-graduate levels.
Beyond master programmes, in many universities, academics interested in Islamic economics and finance through their specialism, including legal studies, have supervised Islamic finance-related PhDs. In particular, Professor Simon Archer's efforts since the early 1990s at Surrey University, until his retirement, should also be mentioned concerning the Islamic accounting field. He has also played an important role in contributing to Islamic finance-related standards and regulations through standard-setting bodies. His involvement in the Reading University Islamic finance master programme should also be acknowledged.
While today, the UK universities remain attractive centres for learning in Islamic finance master and PhD programmes, their sustainability remains an issue due to the financial difficulties and movement of staff. The increased tuition fees in the UK universities, lack of scholarship availability, worsening economic conditions in the Muslim countries make attending the UK based Islamic finance degrees very difficult for the majority of the people in the Muslim world. The quantitative background expectations in the admission process at the UK Islamic finance programme also has adverse impact on the student numbers. Furthermore, due to the changing business model, the UK universities have lost interest in sustaining niche programmes such as Islamic finance. Emerging programmes in the Muslim countries have also contributed to the decline for demand for the UK based Islamic finance postgraduate programmes.
However, the UK programmes have an advantage of developing critical thinking within their Islamic finance related studies due to their distance to the Islamic finance industry. The development of industry requires critical thinkers who can be innovators for new and authentic products and offerings. As followed by the UK based programmes, research-led, research-based and research-informed master and PhD programmes can be the primary solution for developing a critical mind for the future success of the Islamic finance industry and notably Islamic economics and finance studies. I hope that the programmes emerging in many Muslim countries will be able to enhance knowledge and practice production through a critical and analytical approach beyond treating Islamic finance in a prescribed manner.
Professor of Middle Eastern and Islamic Political Economy & Finance Mehmet Asutay