Opinion: Imams – The missing stakeholders in Islamic finance

Rushdi believes that a change agent must tell the truth to a benevolent dictator, religious hardliner, and compassionately connect with youth and have nots.

An investment in knowledge pays the best interest — Benjamin Franklin

In the last 15 years, the period I have been involved in Islamic finance, the most commonly-heard comments include, but not limited to:

  • We need to create awareness.
  • We need to (further) educate the masses.
  • We need to address the question “what’s the difference (compared to conventional finance)”?
  • We need to overcome myths and perceptions amongst Muslims.

Financial institutions, banks and asset management firms, conventional or Islamic, are deemed biased by the man on the street. They are viewed as promoting self-interest, be it collecting premiums, deposits or assets under management. Simply put, they are seen as paying money to collect money, then lending money for more money.

Since the messenger in the process is seen as a self-serving financial institution, notwithstanding role of Shariah scholars, who vet for compliance of structures or regulators, deemed to have contributed to credit crisis l and ll by errors of omission, there are credibility challenges.

Something is quite not right with the present educational and awareness model.


Shariah scholars — putting aside board affiliations — are not well-known by the man on the street. This is more pronounced outside of the scholar’s country, especially for new geographies for Islamic finance, like the Arab Spring countries of North Africa.

Thus, the well-known scholars from Saudi Arabia, Bahrain, Syria, Pakistan, Egypt, Dubai, Qatar, Kuwait and Malaysia may not have a strong following in Libya, Tunisia, Egypt, Morocco, Yemen, etc.

Furthermore, scholars parachuting in for a few days for a seminar or conference does not allow for the “connection with the community” to build the needed trust and confidence.


The Imams of local mosques are the “customised” connection to the community built over time, hence inspiring trust and confidence. They perform the Friday sermon (kuthbaah), perform marriage services, family counselling, starting and completing of the Quran, burial prayers, etc. As gatekeepers to the local community, their words carry more weight than Shariah scholars from distant lands.

Furthermore, Imams may have heard of the Shariah scholars, but the opportunity with interactions with the latter is minimal, if at all, hence they do not “blind-faith” endorse products signed off by them.

Yet, Imams are not trained on Islamic finance, banking, insurance, etc, and, typically, talk in generalities like prohibition against interest (riba) and impermissibility of investing in the “sin” sectors of pork, alcohol, tobacco, etc. They are not in positions to advise on various modalities offinancing homes, car, education, etc, or pre-conditions, like financial ratios, for investing in Shariah-compliant companies. (Obviously the advice by scholars is confined to Shariah adherence, and not to the investments.)

At most, the Imams, especially those in the West, may have an input where the mosque operations funds are deposited, typically interest-free checking accounts.


Financial institutions offering Shariah-compliant services, be it in a Muslim country new to Islamic finance or non-Muslim country with an established Muslim minority, need to think outside of the box on educating the masses. One suggestion is to take some of the marketing, awareness and education budget and allocate it for educating Imams. Obviously, the objective is not make Imams into scholars — although an interesting thought — but “train” them enough to answer basics about financing and investing questions from community members.

It must be understood the Imam can only speak to the Shariah-compliance of the offering, and cannot be seen as endorsing the offering. It becomes the job of sales people of the institution to explain the merits of the offering.


One of the issues often heard, on conflict of interest, is compensation for scholars by institutions they advise. Some believe that scholars are doing God’s work, hence, should not collect a fee, as their reward is in the hereafter.

Notwithstanding the minority view, the question becomes, “should Imam’s be entitled to a fee for every member of their community that becomes the institution’s client?” The simple answer is no, but the mosque should benefit from a community member’s participation facilitated by the Imam.

It’s well-known most mosques, especially in the West, continually raise funds for building, expanding or operations, including an Islamic centre. Thus, a situation of “donour fatigue” often exists and needs addressing, hence, article for another day.


When financial institutions educate Imams, a tripartite win situation exists: an informed Imam answering basic questions on Islamic finance for community members that may become clients and the mosque receives donations.

Rushdi Siddiqui is co-founder and MD of Azka Capital, and advisor to Thomson Reuters for Islamic finance, Halal and OIC. Views expressed are his own and do not reflect the newspaper’s policy.