Islamic finance and Islamic financial products are no longer foreign to Australian financial services market. Since 1980s, these products are available in Sydney, Melbourne, Brisbane and other cities of Australia.
A wide range of Shariah compliant financial products are available to all Australians, Muslims and non-Muslims alike. The retail Islamic products include home finance, leasing or hire purchase facilities, superannuation, fund management under managed investment schemes, property development trusts, Australian equities, international equities and cash management under Shariah principles. These products are offered by a number of Islamic financial services providers in Australia.
There is an un-tapped capacity in the Australian Islamic financial services market, namely in the areas of Islamic banking and Takaful (insurance). Given the potential for high demand, a number of providers are currently panning as well as attempting to introduce Islamic banking and insurance in Australian.
Australian financial services are marketed with Shariah advice and approvals delivered by various Shariah advisory boards. Prominent Australian and international Islamic scholars are members of these boards. Prior to offering a product in the market, Shariah scholars study the relevant products and, if appropriate, certify them as Shariah compliant.
Australian Islamic financial services providers are highly regulated by the federal and State regulatory authorities. Entities incorporated under the Corporations Act 2001 are mainly regulated by Australian Securities and Investment Commission (ASIC) and those established as co-operatives or friendly societies are administered by State/Territory fair trading departments. These regulatory authorities issue, among others, Australian Financial Services Licences (AFSLs) and credit licenses to relevant entities in order to protect the rights of all parties involved.
No official and public statistics is available on the Australian Islamic finance industry and its performance. From personal estimates and guesstimation, the size of Shariah compliant home finance market would be greater than $1 billion, the clientele for leasing/hire purchase is significant and recently there is a high growth in the memberships of Islamic superannuation funds.
Islamic finance has the potentials to economically and financially benefit Australia in several ways. It may attract foreign Islamic funds to be invested in Australian assets, encourage foreign Islamic banks to operate in Australia, Australian banks and fund managers may provide Shariah compliant investment products to middle-eastern countries and Australian universities may offer academic programs on Islamic finance.
With the increase in the Australian Muslim population and wealth, Islamic finance industry can only experience a high growth in the future, creating jobs and positively contributing to the economic growth of the Australian economy.