Italy? The new hub of Islamic finance.
26Lug’21
A preferential path to access Islamic capitals and work with the Middle East markets, but not only, in compliance with the rules of Sharia «certified» by one of the big world of Islamic finance. This is the framework of the agreement signed by the Joint Italian Arab Chamber of Commerce (Jiacc) with the Emirate of Dar Al Sharia to facilitate access to a very rich capital market for large and medium-sized enterprises, but little explored by Italian companies due to the rules that oversee Sharia compliant investments.
«It is the first piece of a broader agreement that will be developed – explains Pietro Paolo Rampino, vice president of Jiacc -. The goal is to make Italy the new European hub for Islamic finance after the exit of Great Britain from the EU». The Islamic financial industry is a consolidated presence in the City where over 5 billion Sharia compliant assets are deposited, but a downsizing of London is given for certain.
The partner of the agreement, Dar Al Sharia, is one of the world’s largest strategic consulting companies in Islamic finance. It is part of Dubai Islamic Bank and offers Sharia-compliant investment instruments and services globally ranging from governance advice, capital research to strategic advisory. It has more than 1,500 transactions, worth about $100 billion.
To operate in the markets with the rules of the Islamic finance – Rampino explains – demands the adoption of a series of procedures and engagements that now Dar Al Sharia can certify, allowing the enterprises that decide for example to compete for a store clerk to Dubai, to be really competitive with the local ones. The total compliance with the rules of Sharia is certified by one of the three big world of Islamic finance».
In the Islamic world the concept of financing is not that of a simple loan: It means the entrustment of a production process to the creditor, through which the capital is guaranteed. You don’t give money for interest. At the base there is the relationship of trust between the parties – explains Rampino -, as debtor and creditor are found to have the same interest and are therefore not opposed».
The agreement between Jiac and Dar Al Sharia develops on different levels. The collaboration will provide consulting services in the field of Sharia compliant to Italian authorities, bodies and companies. But it will also offer a way to access the Islamic capital market, to raise funds to invest in businesses that follow the rules of Islam. According to the Islamic Financial Services Board (IFSB) the liquid assets that are managed in obedience to the religious laws dictated by the Sharia amount to almost 3,500 billion dollars.
They are invested all over the world, not only in Islamic countries, and therefore the advantage for a «certified» company is to be able to compete wherever there are Sharia compliant orders.