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Women in Islamic Finance

Islamic finance, like conventional financial services, remains a largely male-dominated industry. A woman has yet to be appointed as chief executive of an Islamic bank anywhere, even though several women have excelled in the industry. Empowering women in the sector will largely depend on the existing role of women in a particular country or economy . a role that ranges widely across different markets.

In Saudi Arabia, for instance, says Samra al-Kuwaiz, managing director of the Womens Division of Osool Brokerage Company in Jeddah: 'We live in a male-dominated society, which is only now viewing women as a possible economic force. Saudi Arabia is a special case. We are different from other GCC countries. We have
complete segregation. We have let's say, 'Islamic challenges', which are more evident in the Kingdom.  

The difficult position women face in Saudi Arabia is exemplified in the case of Dr. Nahed Taher, former chief economist of The National Commercial Bank (NCB), one of the largest banks in Saudi Arabia. She spearheaded the conversion of NCB's retail banking business to an Islamic consumer finance business, a process which is still ongoing .but left the bank to be appointed chief executive officer of First Gulf Bank in Bahrain, a position that would not be possible for a woman in her native Saudi Arabia.

There is, however, little doubt that women have huge financial impact in the Kingdom and the other GCC countries. Women, for instance, own between 10 percent - 30 percent of brokerage accounts in Saudi Arabia. They also own some 40 percent of family-run companies, often as silent partners.  They have some SR10bn in deposits in banks and financial institutions.

In the rest of the GCC, despite fewer formal restrictions on women in the workplace, very few women are involved in the Islamic finance sector, this may, in part, be due to a strong conservative undercurrent in these societies.  In many respects, it is Malaysian women who have set the pace in Islamic finance. But even in Malaysia, while women head the authorities that regulate Islamic finance and capital markets, no Malaysian woman has risen to head an Islamic bank.

Dr. Zeti Akhtar Aziz is the celebrated Governor of Bank Negara Malaysia (the Malaysian central bank) under whose watch the Islamic banking sector has flourished, and who brought forward the liberalization of the Malaysian Islamic banking market by three years by awarding licenses to three foreign operators: Alrajhi Bank; Kuwait Finance House; and Asia Finance Bank. Similarly, Dato Zarinah Anwar is the Chairman of the Securities Commission, having previously worked for the RHB Group, where she was responsible for introducing the Dow Jones RHB Islamic Equity Index in 2006.

Several non-Muslim women are also seasoned Islamic bankers. One of the most experienced is Stella Cox, managing director and head of Islamic finance at Dawnay Day CAP, the London based Islamic finance commodity and intermediation entity, whose Islamic commodity finance book business is in excess of US$3bn. As the market for Islamic finance becomes more established in non-Muslim countries,
including the U.K., the role of women in the sector will undoubtedly become stronger, and the experience gained by women in the U.K. and elsewhere will
be exported to other countries.  Women are also coming to the fore in the Islamic finance departments of international law firms, rating agencies and advisory firms. Currently, women are also working in senior positions in the Islamic banking sectors in Brunei, South Africa and the U.K.

Malaysia has gone one step further in an area that has been virtually closed to women elsewhere. Dr. Eg Rabiah Adawiah Binti Engku Ali, an academic at the International Islamic University of Malaysia, is the first registered female Islamic finance Shariah advisor, a development that could change the face of the Shariah advisory business over the next decade.

The rising involvement of women in Islamic finance has some potential to play a role in tackling the human resources bottleneck in Islamic finance.  However, for this to happen, many Muslim countries would have to introduce enabling legislation guaranteeing gender equality and equal opportunities in the workplace.  Women in Islamic finance has some potential to play a role in tackling the human resources bottleneck in Islamic finance.

There is also a straight business case for an increasing role for women in Islamic finance: they can unlock major new market segments for Islamic banks. The emergence of the Sukuk, according to Ms. al-Kuwaiz represents a significant market opportunity.  'Women are risk averse,' she suggests. 'The best kind of investment
opportunity for them would be a diversified portfolio based on bonds, Sukuk, equities and real estate.


Jeddah Chamber of Commerce and Industry
© 2007 KPMG International
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