Many non-Muslims, and even some Muslims in Ghana, have it in their mind that, the Islamic code of conduct which is popularly known as Shariah is full of penal codes. In other words, they believe that the Shariah is only about chopping off the heads of armed robbers and hard drug dealers, chopping off the hands of thieves, whipping and stoning adulterers and fornicators, falling gays and lesbians to death, penalizing, naming and shaming bribe takers and payers, etc. However, it is important to note that this is only the criminal (penal) aspect of the Shariah which is justifiable under the law of the Shariah but has nothing to do with Islamic banking and finance.
The Sharia comprises a complete code of conduct for Muslims which encapsulates five basic elements: the first is Aqeeda; which governs belief in Allah. The second is Ibadat; which also governs the relationship between man and his Creator. The third is Akhlaq; matters which governs disciplining one’s self regarding relationships with others. The fourth is Muamalat; which governs the political, economic, and financial aspects of life, and then the penal code. Islamic banking and finance fall under the orbit of the Muamalat aspect.
Owing to this, we are today going to deal with some misconceptions about Islamic banking and finance. Misconceptions about Islamic banking and finance are ostensibly one of the major setbacks for advocators of Islamic finance in Ghana like myself, and many notable personalities such as Mohammed Yaw Broni, Prof. John Gartchie Gatsi, the Dean of the University of Cape Coast Business School, Brother Fawz Amadu, etc and institutions such as the Islamic Finance Research Institute Ghana (IFRIG). I hope and pray that after this critical education, Ghanaians will no longer think that Islamic banking and finance is coming to Ghana to chop off the heads and hands of wrongdoers but rather, to promote economic growth and wider financial inclusiveness for Ghana. The following misconceptions are rampant among many Ghanaians:
Islamic finance is only for Muslims: One of the biggest misconceptions is that Islamic banking is only for Muslims. In reality, Islamic financial principles can benefit anyone, regardless of their religious beliefs. Secular countries with a majority of non-Muslim population such as the United Kingdom, France, Luxembourg, Germany, Switzerland, Netherlands, Belgium, Austria, Sweden, Norway, etc practice Islamic banking and finance in their jurisdictions. Some international conventional banks with Islamic banking section include; HSBC Amanah, Standard Chartered Saadiq, CIMB Islamic, the Islamic Bank of Britain (IBB), the European Islamic Investment Bank (EIIB), ABC International Bank, and many more. In short, Islamic finance is growing faster in both Muslim majority and Muslim minority countries.
Limited Financial Products: Some people believe that Islamic finance offers only a limited range of financial products and services. However, Islamic banks provide a wide range of products that are comparable to those offered by conventional banks, and even more.
More Restrictive: There is a misconception that Islamic banking is more restrictive than conventional banking due to the prohibition of interest and certain types of investments. However, Islamic banking promotes ethical and socially responsible financial practices that can benefit individuals, businesses, the society, and the environment as a whole.
Less Profitable: Some people believe that Islamic banking is less profitable than conventional banking. In reality, Islamic financial institutions have shown resilience during economic downturns and have demonstrated sustainable growth over the years. For example, no Islamic bank needed to be bailed out with taxpayers’ money during the 2008-09 financial crunch because they were able to withstand the global financial shocks.
Only for Sharia Compliance: Another misconception is that only Muslims who adhere strictly to Sharia principles can benefit from Islamic finance. However, Islamic banking principles can be attractive to non-Muslims seeking ethical and socially responsible financial solutions.
Complex and Inaccessible: Some may view Islamic finance as complex and difficult to understand, leading to the belief that it is inaccessible to the general public. In reality, Islamic banking principles can be easily understood and implemented, and there are resources available to educate individuals about this financial system.
We hope and pray that our readers will spread this invaluable enlightening to address these misconceptions and provide accurate information about Islamic banking and finance. We also hope that these insha Allah will also promote greater awareness and understanding of this ethical and socially responsible financial system. May this be sadaqat jariya in our closet of good deeds ameen.
And Allah knows best! “Praise be to Allah in Whose favor good deeds are accomplished” (ibn Majah 3803).
YAHAYA ILIASU MUSTAPHA
The writer is an Islamic Banking and Finance patron and advocate in Ghana and beyond.
Email: yahaya0246873726@gmail.com
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0506218343 / 0246873726
