The Islamic Finance Council UK (IFC), based in Scotland, estimates that an investment of £ 120m and £ 200m could be invested in Scotland for infrastructure products following a successful Islamic Sukuk bond.
24th October 2013
Scotland is emerging itself as a potential hub for Islamic finance following a major conference held by leading Scottish law firm Todd Murrays and the Islamic Finance Council UK. The conference discussed the possibility of attracting investments from the Middle East for infrastructure and renewable energy projects and outlined the opportunities for ethical investors, to tap into the lucrative industry that is estimated to be worth over $ 2.3 billion. The Islamic Finance Council UK (IFC), based in Scotland, estimates that an investment of £ 120m and £ 200m could be invested in Scotland for infrastructure products following a successful Islamic Sukuk bond.
Head of Banking & Finance at Tods Murray LLP and Executive Board Member of the Islamic Finance Council UK (IFC), Graham Burnside said, “The UK has the potential for provision of faith based financial products that adhere to the financial principles of Shariah compliant financing. Scotland is now firmly at the centre of this niche market which is growing at an estimated rate of 15-20 percent per annum.
Demand for Ethical Products
In 2005, Tods Murray LLP, produced the first Scottish Islamic mortgage, allowing Islamic scots to purchase homes through United National Bank, under agreements in accordance with their faith. Last year, the Islamic Bank of Britain introduced their Scottish Islamic mortgage or Home Purchase Plan (HPP) which prohibits the receipt of Riba (interest) by both the buyer and lender, as it is against the principles of Sharia Law. Recent polls have shown that more than half of Scots want to see some of their money invested using green or ethical criteria – higher than the UK average. Imran Pasha, Head of Sales and Service at Islamic Bank of Britain (IBB) said “At an industry level, Scotland already has strong Islamic finance credentials based on the long standing work carried out by the IFC and Tods Murray. This, combined with a growing appetite amongst businesses and consumers for ethical finance, puts Scotland in a good position to develop itself as an Islamic finance hub.”
History of Ethical Practice
The creator of the first Scottish Islamic mortgage and IFC board member, Graham Burnside says it is not an exaggeration that Scotland could drive forward the expansion of Islamic banking in its key western stronghold. He says Scotland has sympathy with faith based and ethical finance which stretches all the way back to Rev Henry Duncan and the formation of the first savings bank for the underprivileged in 1810 in Dumfriesshire. “If the UK wishes to be seen as a hub for Islamic finance, i see no reason why Scotland cannot take a leading role,” he said.
“If you go back 150 or 200 years, many of the banking products developed here had a church inspired origin, so there are more connections historically than meets the eye” he said.