Islamic Finance Budding Slowly in Russia
Published: June 30, 2014 (Issue # 1817)
There are at least 10 million Muslims in Russia, but only four public organizations where they can invest and borrow in compliance with the Quran.
Islamic finance is a fast-growing field worldwide, and proponents say it offers both ethical and practical benefits to the faithful and non-Muslims alike. Russia, however, lags behind in the industry, analysts and Russian Islamic financiers interviewed by The Moscow Times agreed.
Russian Muslims are slow to change their financial habits, while nonbelievers are plagued by a deep-rooted distrust of Islam — as are, to some extent, the financial authorities, who are in no hurry to adapt economic legislation to facilitate Islamic banking, analysts said.
"The religious renaissance that spans all creeds in Russia does not mean people rush out to seek services that comply with their religion," said Andrei Juravliov, a leading expert on Islamic finance who teaches at Moscow State University.
Still, an Islamic finance industry has been budding over the past decade in Russia, and analysts and players show cautious optimism about its prospects.
"The niche is small, but the demand is better than, say, seven years ago," said Rashid Nizameyev, the head of finance house Amal, which is one of those four venues to provide Islamic banking services.
"There are more believers now … though only a fraction try to actually live by their religion's customs," said Nizameyev, whose organization is based in Russia's predominantly Muslim republic of Tatarstan.
No Money From Money
The core tenet of Islamic banking is a ban on riba, or interest, and loaning money for profit. The ban comes straight from the Prophet Muhammad, and is spelled out in the Quran.
On the face of it, such a ban should eliminate any possibility of sharia-compliant banking — but this is not actually the case.
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