CAIRO - An already flourishing Islamic bank in the the United Kingdom is expanding its branches in the northern city of Yorkshire and other British cities to answer a strong demand for its Shari`ah-compliant services.
We hope that this will give us a foothold in the Yorkshire region. We have plans to expand throughout the UK in 2012, Imran Pasha, head of retail department at the Islamic Bank of Britain (IBB), told the Yorkshire Post on Tuesday, January 24.
We expect a tenfold increase in business in the next three to four years. One of the key aspects of that is the agency model, where we partner with a complementary business and we use that as a springboard to go out into the target market and offer them Shari`ah-compliant products and services.
The Islamic Bank of Britain, granted a license in August 2004, became the first Islamic bank in Britain and has continued to attract customers for mortgages.
It opened its eighth branch in the country in the office of Reeds Rains Estate agents in Dewsbury, West Yorkshire.
The fact we've chosen Dewsbury to be the first agency shows the importance we attach to the West Yorkshire region, Pasha said.
It will allow us to access the target market in the surrounding towns and cities. We are the largest provider of Islamic retail products in the UK.
We plan to open another five agencies across the UK this year. We will then review the performance, and if there's demand, and the business case stacks up, we are open to suggestions of opening more outlets in the Yorkshire region, he added.
Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
Islamic banking is one of the fastest growing financial sectors in the world.
The Shari`ah-compliant system is now being practiced in 50 countries worldwide, making it one of the fastest growing sectors in the global financial industry.
Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.
With London becoming a hub for the Islamic banking, the IBB eyes to take a share of the booming industry.
We're hopeful of capturing 30 to 40 per cent of the target market. Over the last seven years, we have grown from zero to 50,000 customers across the UK, Pasha told the Yorkshire Post.
This year we'll be looking at re-launching our commercial property finance proposition, which will be looking at bespoke deals for the target market.A deepening debt crisis in the West gave Islamic banking an increasing credibility, becoming a safer and more stable alternative to conventional finance.
The recent economic crisis has been a boon for us. We have people of different faiths, ringing us up and enquiring about how they can apply for it, Pasha said.
It's about having an alternative to interest-based banking, which is fair and transparent and which also conforms to their ethical beliefs.
The bank intends to educate its customers of all beliefs about the benefits of Islamic finance
There's a large group (of customers) who want to see people face to face. Traditional banks and traditional building societies have lost sight of that. We want to be a community bank," said Simon Walker, the head of home purchase plan sales at the IBB.
It's about reaching out to the community through different distribution channels. One of the key pillars of our growth over the next four or five years is commercial property finance.
The Muslim community in the UK is 2.5m people. That's growing at a fairly rapid rate. We want to be a one-stop shop for a range of products, Walker added.
Sohaib Bin Hamid, the bank's Dewsbury-based business development manager, agrees.
We have a lot of non-Muslim clients, purely because of the way that we bank. We have no toxic liabilities, Hamid said.
A lot of the banks are cutting thousands of jobs - we are recruiting people. We've seen a big downturn and we need to contribute to getting the economy back where it belongs.