Raphie Hayat conducted a research on ‘Islamic finance’ concluding that this is not safer than ‘regular financing’, as is often argued.

  • Question: Is Islamic financing nothing more than a trick to attract Muslims?

Hayat: It is a bit too farfetched to call it a trick. For a company to be called ‘halal’, it has to meet strict requirements. Companies that produce alcohol or pork are excluded for example. And a company’s debt ought not to be higher than 33% of the total balance. And not more than 5% of income should be derived from interest. It is mainly because of this last requirements that shares of many regular banks can never be traded as a ‘halal’ product.

  • Question: There are clear rules. But you do warn for Islamic investment to become a marketing trick.

Hayat: Besides the Financial rules, Islam also requires companies to take into consideration the environment, to have a positive influence on society and good governance. However, these are requirements that are often not met yet. And thus until now, according to my opinion, there is no full ‘seal of quality’.

  • Question: According to the Qur’an, interest is a bad thing. But an Islamic investor does receives efficiency on his shares. Is this an example of ‘special’ Sharia interpretation?

Hayat: I disagree. Interest is forbidden, because it is not dependent upon the profit. Effiency in contrast, ís dependent upon profit. So an investor shares the risk with a company, and this is the essence of the Islamic way of doing business.

  • Question: But religious shares do not withhold the Islamic investor to take excessive risks.

Hayat: this is the responsibility of this person himself.

  • Question: You also write that a small group of Sharia scholars, that are involved in ‘halal’-certificates within Dow Jones Index and FTSE earn around 4.5 million dollar a year.

Hayat: they get paid per certificate. So I have the impression there is a tendency to apply the rules flexible. This is why I propose companies to be judged by an independent institute, for example by a institute from the Netherlands, Sweden or Switzerland.

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