PITAPOLICY completes this month’s theme of “Socially Responsible Organizing and Investing” with a joint piece by Mehrunisa Qayyum and Afaf Qayyum reviewing how trends of SRI mirror a growing interest in Islamic Finance.
August began with our first post, which was by a new contributor, Zena F. Itani, who attended AIDS Conference Week in Washington, DC. On August 7th, our second post by Massoud Hayoun asked how the Arab Revolution in Tunisia impacted tourism and the related social responsibilities that the tourism sector might ignore. August 15th’s post covered the socially responsible organizing efforts in the US: “Is Lobbying Considered Socially Responsible Organizing?” August 19th’s post reviewed an infrastructural project gone wrong in Palestine. And on August 19th, PITAPOLICY contributors commented on how Ramadan offers an opportunity for SRI through Zakat giving and other venues.
This week’s piece, and the last in this month’s series, identifies four trends in the Investment industry that relate to the growing interest and need to understand Islamic Finance principles. The financial world might be undergoing a crisis in the most industrialized countries, but this poses an opportunity to explore capital accruing in other hubs. What new trend will become the norm? Will an Islamic Finance trend amount to a best practice for the financial world?
Trend #1: Culture of Socially Responsible Investment
Trend #2: Establishing Islamic Markets Indices
Trend #3: Non-Muslim Majority Countries Take Notice
Trend #4: Islamic Banks May Be the Other Side of the SRI Coin
By: Mehrunisa Qayyum & Afaf Qayyum
Originally printed in The Majalla magazine
Ironically, the global financial crisis has triggered conservative investing through non-conventional means: non-Muslims are increasingly choosing to invest through Islamic institutions’ portfolios. The irony is particularly striking in the US, since Islamic financing often times carries the misnomer of “terrorist-financing”. However, for those looking to pursue more ethical investments, and with the rise of socially responsible investment culture, Islamic financial institutions create a new investing culture—specifically through Islamically-managed hedge-funds.
Before one identifies further trends that reflect the “mainstreaming” of Islamic investments, two questions frame the modern appeal of Islamic finance: 1) what are the religious prescriptions for this type of investment; and, 2) why would non-Muslims choose a mutual fund that follows Islamic Law while many non-Muslims worry that Islamic Law will trickle into their secular nations’ legislative process? The latter is a glaring paradox. According to Reuters click here to continue…
Note: Afaf Qayyum earned a BA in Economics from the University of Chicago and an MAS in Accounting fro Northern Illinois University. Her interest is in Islamic Finance and its relevance to philanthropy. Mehrunisa Qayyum is the founder of PITAPOLICY Consulting and is a Huffington Post Blogger.