Malaysia’s Shariah Advisory Council appointed a second female scholar to its 11-member board in November. Indonesia has six women on its panel of 35 experts, Ma’ruf Amin, chairman of the country’s National Shariah Council, said in an interview on Thursday.
Malaysia’s central bank and the securities commission are both headed by women, while Liza Mohd Noor is CEO at RAM Rating Services, which provides ratings for Islamic bonds.
“Previously, it was difficult for women to enter the industry. Now people have broken that boundary, especially in Malaysia,” Aznan Hasan, associate professor at the Kuala Lumpur-based International Islamic University Malaysia, said on Dec. 20. “More women are coming in, and this is good because we need people.”
Encouraging women to work in Islamic finance will help meet demand for experts in an industry the Islamic Financial Services Board estimates has been growing 20 percent annually since 2000, with assets exceeding $1 trillion.
About 50,000 professionals will be needed globally over the next five to seven years to meet demand, Ishaq Bhatti, director of Melbourne-based La Trobe University’s Islamic banking and finance program, said on Dec. 10.
While men tend to dominate executive positions in Indonesia, women are making inroads. Eka B. Danuwirana, head of human capital at Bank Syariah Mandiri, said there were four female division heads out of 26 total divisions at the bank.
“But there has been a significant increase in female top executive promotions,” Eka told the Jakarta Globe. “Based on performance levels in 2010, one of our best branches is led by a female.”
U. Saefudin Noer, senior vice president and head of Shariah banking at CIMB Niaga Syariah, said his bank had five female branch heads among 22 branch offices. That is up from 2009, when two women held such positions.
The lack of prominent female banking executives stems from “history, culture and perceptions of women,” said Nida Raza, senior vice president of capital markets at Unicorn Investment Bank BSC in Manama, Bahrain.
In Saudi Arabia, a Sunni Muslim-majority country where women are required to have a male guardian, about 15 percent of the labor force was female in 2009, according to a report by the Geneva-based International Labor Organization, a United Nations agency.
“Getting a visa to Saudi is really difficult, and even when I’m there I face various challenges,” Noripah Kamso, chief executive officer of Kuala Lumpur-based CIMB-Principal Asset Management, a unit of CIMB Group Holdings, the world’s biggest sukuk arranger, said on Dec. 23.
“I was once chased by a Saudi police officer because I entered from the wrong door, and traveling without a male colleague is impossible.”
As interest in the industry grows, women, including those from the Middle East, are likely to play a greater role, said Engku Rabiah Adawiah Engku Ali, the first female appointee to Malaysia’s Shariah Advisory Council and an associate professor at the Ahmad Ibrahim Kuliyyah of Laws, International Islamic University Malaysia in Kuala Lumpur.
Global sales of sukuk, which pay returns based on asset flows to comply with the religion’s ban on interest, fell 15 percent in 2010 to $17.1 billion, according to data compiled by Bloomberg. Issuance reached a record $31 billion in 2007.
Shariah-compliant bonds returned 12.8 percent last year, the HSBC/Nasdaq Dubai US Dollar Sukuk Index shows, compared with 19.8 percent the previous year. Debt in emerging markets gained 12.2 percent, from 29.8 percent in 2009, according to JPMorgan Chase and Co.’s EMBI Global Diversified Index.
The difference between the average yield for sukuk in developing nations and the London interbank offered rate narrowed 178 basis points, or 1.78 percentage points, to 290 last year, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index. Average yields dropped 252 basis points to 4.74 percent.
A shortage of scholars increases the risk of conflicts of interest as many sit on various advisory boards at the same time, according to the Manama-based Accounting and Auditing Organization for Islamic Financial Institutions, an industry standard-setting body.
Sheikh Nizam Yaquby of Bahrain and Syria’s Abdul Sattar Abu Ghuddah, who each serve on 85 boards of Islamic financial institutions, ranked first by the number of seats among the top 20 religious experts in an October report from Zawya, an online Middle East business news and directory site, and FundsWork AG, a consulting company based in Kronberg, Germany.
In Malaysia, regulations are aimed at limiting such conflicts of interest. Under Bank Negara Malaysia regulations, a Shariah scholar can sit on only one board for each type of Islamic financial institution, meaning an expert on the panel of an Islamic bank can only sit on the board of another non-bank entity such as an insurance company, or takaful.
The rule “enlarges the talent pool and gives more opportunities,” said Engku Rabiah, who was once appointed to the boards of six to seven Islamic banks and takaful companies before the rule was passed in 2004.
Unicorn Investment Bank’s Raza said the shortage of women in Islamic finance is easing as more female Westerners enter the market.
“This will have a knock-on effect on” the Middle East, Raza said in an interview on Thursday. That “may lead to a rise in women in the Islamic finance industry,” she said.
Source : http://www.thejakartaglobe.com/business/female-shariah-scholars-see-gender-gap-closing-in-finance/414879 - Jan 3, 2011
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