More for feminist finance?

When Malaysian Aida Othman signed up for the new law programme at the Islamic university, she did not expect to become one the few women with their hands on the levers of the world’s $1trn Islamic finance sector.

“There are not many women involved my job,” Aida, who manages the sharia advisory practice at Malaysia’s biggest law firm, says. “I’m glad to be able to show to young graduates and young scholars in my field if you’re interested enough there is a way into sharia advisory,” the 41-year-old, who went on to study at Cambridge and Harvard, said.

Islamic finance has embraced women relatively rapidly in its 30-year modern history, as burgeoning demand for expert lawyers and growing female education rewrite the rules of the business. As Islamic finance expands 15-20 percent a year and enters new markets from Australia to South Africa, so the need has grown for more sharia advisers who can structure financial transactions according to Islamic rules that crucially include a ban on interest.

Sharia advisers are typically Islamic law scholars who are able to marry sharia with international banking and legal practices to help banks devise sharia-compliant products ranging from mortgages to hedge funds. There are 221 Islamic finance scholars globally but only a handful are in high demand, with the top six occupying almost a third of the 1,054 board positions open to Islamic experts, a Funds@Work report shows.

This small circle of men dominate the boards of Islamic banks but there are now about 10 women sharia advisers in Malaysia, home to the world’s largest market for sukuk, or Islamic bonds.

The number of women sharia scholars in Malaysia has more than tripled in the last five years according to some estimates. There are no official figures, but practitioners say there are no women sharia advisers in the Middle East.

Mideast lags Malaysia
While the culture has opened the way to the rise of female advisers in Malaysia, more conservative social mores have kept women sidelined from the Islamic finance industry in the Gulf Arab region, experts say. “The need for sharia advisers will increase,” said Mohamad Safri Shahul Hamid, deputy chief executive at Malaysia’s MIDF Amanah Investment Bank, a sukuk arranger.

“Will we see more women? In Malaysia, we will because they will want to follow the footsteps of noted women scholars. I’m not so sure about the Middle East. I still think they have to address the cultural issue. But they are moving in the right direction as, at least commercially, there are a lot more avenues for women to join the workforce.”

More than half of Malaysia’s 27 million people are Muslim and follow the Shafi’i branch of Sunni Islam, which is regarded as taking a more moderate stand on many issues. The Middle East is home to different strands of Sunni and Shi’ite Islam which means Muslim women enjoy vareying degrees of freedom. In the United Arab Emirates, for instance, Muslim women face few restraints compared to Saudi Arabia, where they are forbidden from driving and travelling unchaperoned.

Malaysian Muslim women face little, if any, restrictions on their movements, have equal educational opportunities and women comprise about half of the country’s total workforce. Muslim women in Malaysia routinely hold political office, run large corporations and the country’s central bank and capital market regulator are both led by women.

EONCap Islamic, the sharia banking arm of Malaysian financial group EON Bank, and the local unit of Kuwait Finance House  both have women chief executives. Women scholars also advise Bank Rakyat and Bank Islam, which is Malaysia’s second largest sharia-compliant lender, as well as AmIslamic Bank and the local Islamic banking arms of HSBC and Standard Chartered.

The rise of women sharia advisers in Malaysia was partly due to a central bank ruling that a scholar can only advise one bank and one insurer at a time to avoid conflicts of interest.

A significant minority?
Men still outnumber women five to one at sharia scholar conferences in Malaysia, but women have had a hand in major controversial rulings such as approving the bai inah sale, which fed into fierce theological debates that divide the industry. With or without women, different legal schools of Islam mean some deals are acceptable to some Muslims but not to others.

“Sometimes banks have no other options,” said Shamsiah Mohamad, a Standard Chartered Saadiq Malaysia adviser who has sanctioned the use of the Islamic sale and buyback structure. “Based on the Shafi’i school of thought, inah is sharia-compliant but it is not accepted in the Middle East. We gave our approval reluctantly.”

Shamsiah, who wears a headscarf and traditional Malay dress, speaks only a smattering of English and utters her views in barely audible tones, but confidently fields questions on complex topics like foreign exchange forward contracts. The 43-year-old is part of an 11-member team of national level sharia advisers, which issues rulings governing the world’s largest sukuk market. But she says her career ambitions take into account her family and her limited grasp of English.

 “In Islam, we need our husbands’ approval,” Shamsiah, who has a five-year-old son, told Reuters at the university where she teaches Islamic banking. Most women advisers say they have not experienced gender discrimination although some say they are not always taken seriously at conferences, for instance.

 “My duty is to speak out because to me that is my view. It is not a matter of whether people accept you or not,” said HSBC Amanah Malaysia adviser Rusni Hassan, one of eight children raised by a single mother in a village in northern Malaysia. “I am used to it. I just say whatever I want to say.”    

And regardless of any setbacks, Aida is optimistic about the prospects for women who want to get into the sector. “Traditionally issuance of Islamic rulings and fatwas have been monopolised by men,” she said. “There are no express rulings prohibiting women from being involved in it. There are opportunities for many more, for ladies who are willing to step up.”