Several months ago, came across this question through some published blog article. This is a very critical question which is thought provoking and is also related to the existing challenges in human capital in Islamic Finance. As we laid out in our Global Islamic Finance Education 2013 report, there are several issues which are chained together in the human capital challenge. Although awareness among the youth has neither been among the worth mentioning motion in major Islamic Finance forums, nor was it included in GIFE 2013 report, this is a critical matter of discussion for the future of Islamic Finance industry.

Traditionally the issue of Riba and the fact that the most obvious form of Riba is actually the term ‘interest’ that modern day banking system lives on, has not been a topic of discussion in the common Muslim household. So when the youth grows up without any understanding of it, while at the same time studying at school how to calculate interest rates and having no idea of how a bank can operate without interest, isn’t it natural to find himself/herself in a confusing state as an adult when he/she first gets exposed to the matter of Riba and its significance in the faith that he/she follows?

In a confusing state human being doesn’t know how to react in the most logical manner. We see various reactions from the Muslim consumers regarding Islamic Finance. In its extreme expression, we hear this stereotypical claim from both conservative Muslims and Muslims whose reasonings are largely influenced by secular thoughts or who are indifferent about religion in matters of finance, that Islamic Finance is a scam and doesn’t exist in reality. Dealing with this perception has been among the strongest challenges for Islamic Financial institutions to market and sell their products and services among segments of customers even when their products and services were reviewed and accredited by independent Shariah Boards.

One convincing reason for the root of this perception is the way Islamic banking and finance is integrated within the conventional framework which is inseparable from Riba from its existence. Another reason being the mismatch or misrepresentation between theory and practices by IFIs in some cases. As marketing gurus say perception is something that doesn’t change over time and once perception is formed it is formed (unless it is shaken from its root). So it will be of little benefit for the IF institutions to try to change this perception externally without addressing the roots of the formation of it.

Education shapes the minds and thoughts of a human being. It develops his/her perspective and understanding about how to reason with a matter. The curriculums in K-12 to higher education system that exist currently in almost all parts of the world is inherited from the western thinking and innovation where there is no room for understanding sections of business math without calculating interest rates.

Here is an alternate teaching method that few Islamic Schools in the west are undertaking in regards to integrating knowledge from the Quran and Sunnah (two primary sources of Islamic Finance) into the existing body of secular knowledge. This is a non-conventional approach, which is worth exploring and investing in for the purpose of educating youth and preparing them for the shifting global economic paradigm.

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