People who buy an Islamic financial product run a higher irks of a bad investment than buyers of traditional financial products.  This is because the sellers, agents and advisers on the one hand, and the consumers on the other, still don’t know much about these products, according to a study by De Nederlandsche Bank (DNB), which supervises Dutch banking.

The researchers say that sellers must offer more information about the specific risks that Islamic style contracts can have.

Worldwide Islamic banking is a growing niche-market.  Great Britain is the most advanced in offering products for Muslims.  There appears to also be demand in the Netherlands.  Large banks in the Netherlands are still not offering such products.

Islamic financial products comply with Sharia law.  This means that the sellers may not charge interest or invest money in pork, alcohol or weapon industries.  Through other constructions it’s possible to enable customers to save or contract loans.

De Nederlandsche Bank foresaw last year that the demand for Islamic products will increase in the Netherlands, due to an increase in population and a higher education and income level of Dutch Muslims.

Source: Beurs Duivel (Dutch)


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