For many people, signing up for a savings account in North America is a decision strongly influenced by the interest rate the bank offers—the higher, the better. But in regions such as Saudi Arabia, United Arab Emirates and other Islamic countries, gaining interest on monetary sums is an option shunned by many. This is due to the belief that, according Islamic Shari’a law, earning interest on finances and investing in commodities that contravene Islamic law are forbidden practices.
As Canada’s Muslim community continues to grow, the demand for Islamic finance is on the rise. Canadian banks are unable to cooperate, primarily due to a lack of knowledge on the subject.
With the Islamic community expected to form 4.7 per cent of Canada’s population by 2017, the lack of Islamic finance may become an obstacle for agreements between banks and their clients, especially since there is no legal barrier to offering such finance in Canada, as shown by a study by Canada Mortgage and Housing Corp.
To solve this problem, Scarborough’s Centennial College has decided to become the first campus in Canada to teach Islamic finance. The $500 course will be available to students as a part of the accounting program, as a stand-alone course, or for corporate training, and will be taught by Islamic scholars.
“We have created the course in response to demand from a number of sectors—including one of the major banks that said it wants to be able to talk the same language as clients whose background is based in Islamic finance,” said John Harris, Centennial’s chair of the accounting and financial services programs.
Throughout the course, students will learn how to form legal agreements where both parties agree to fulfill the deal without interest. This may be done through a letter of credit or guarantee. The course will also cover bank loans and mortgages, among many other topics.
Observers believe this may be big step for Canada, since Islamic finance, which has increased by 20 per cent each year since 2001, is expected to be the fastest-growing segment.