Islamic Finance is rapidly growing as a sector, offering itself as not just a Shariah-compliant model of financing, but also as a viable alternative to more traditional Western banking methods. It is the fastest-growing section of the global financial market and as such, is demanding more and more qualified individuals with a knowledge of Islamic banking and finance. Islamic banking and financial models now operate in more than 70 countries worldwide and by studying it at masters level, you could become a part of it.
What is Islamic Finance?
Rather than requesting a loan for a new car, as one would do if buying a car using a Western bank, a customer would approach an Islamic bank to buy a car from them. The bank wouldn’t loan the money to buy the car, rather it would buy the car then sell it to the customer at an increased rate, with the customer paying for the car in instalments over a set period of time. The Islamic financial system varies greatly to that of its Western counterpart. The biggest difference is that charging interest isn’t permissible within the Islamic finance and banking model. This is because money is viewed as a tool for exchange or storing value, not for seeking profit from trading. Therefore, Islamic banks cannot generate a profit in the same way a Western bank can. In order to make a profit, the Islamic financial model is asset-based, trading commodities. It’s a system that is built around buyers and sellers, rather than borrowers and lenders. This highlights one of the key principles of the Islamic financial system; risk sharing.
The price of a masters degrees in Islamic Finance are inline with the majority of other masters level degrees, costing between £4,000 and £9,000 and varying based on the institution, teaching mode and award type.
Some postgraduate degrees in Islamic Finance may require students to attend an entrance interview. To help you understand postgraduate interviews we have put together an article for the top 10 questions that are likely to pop up and the best ways that you can answer them: Top 10 Postgraduate Interview Questions.
By studying Islamic finance, you’ll develop your understandings of the economics of the system including the legal and regulatory framework which do differ to Western financial systems. Shariah compliance is another key element of masters degrees in Islamic finance, which along with the development of your understanding of issues such as risk and techniques may seem peculiar at first, but which are key to the Islamic financial model. Ethical and social responsibilities are important within Islamic finance and these guidelines are generally covered in a way which compares them to Western practices. It is a fascinating subject to study, especially amid the economic climate that surrounds Western banking models.