KUALA LUMPUR -- The world's growing Muslim population means the potential for Islamic finance is virtually limitless. What is limited is the pool of talent with the skills to manage funds in accordance with Shariah, or Islamic law.
Malaysia, which wants to establish itself as an international hub for Shariah-compliant finance, is leading the charge to change that.
In one recent class at the International Center for Education in Islamic Finance (INCEIF), a graduate school in Kuala Lumpur, about 40 students were jotting down English technical terms in their notebooks. The lesson of the day was "banking practice."
The class was as diverse as they come, much like the school itself: Since it opened with the backing of the government and central bank in 2006, half the 1,300-plus graduates have been Malaysians, but the others have hailed from over 70 countries. The list includes predominantly Muslim nations, like Indonesia, Pakistan and Somalia, along with countries with few Muslims. Students have come from Japanese banking institutions, for example; one need not be Muslim to enroll.
In that "banking practice" class, roughly half of the students were women in headscarves.
Dzalin Ayub, the school's deputy president operations, is very clear about its mission. "I am focusing on producing leaders" in the field, he said.
Though the decline of crude oil prices robbed Islamic finance of some of its momentum, the market nevertheless continues to grow. It will only get bigger: The global Muslim population, estimated at 1.6 billion in 2010, is projected to overtake the Christian population by 2100, according to the Pew Research Center in the U.S.
In Asia, in particular, the rising number of Muslims and brisk economic growth have increased demand. Many adherents are wary of using conventional banks, which naturally do not abide by Islamic principles, such as the prohibition on interest.
Hence the need for more Islamic finance experts. A number of Middle Eastern institutes provide training, but Malaysia is taking the initiative on its own.
Nadia Mohd Noh, a 27-year-old student pursuing a doctorate at INCEIF, enrolled after studying Islamic finance at another Malaysian college and then obtaining a master's degree in conventional finance in Australia. She is interested in Islamic finance that attracts not only Muslims but also non-Muslims.
"My target is always to be a lecturer [at an Islamic finance school]," she said.
Daud Cho, a South Korean in his mid-30s, aims to wrap up his master's degree at INCEIF in one year -- by this December. His career at a major engineering company has focused on the construction of petroleum and gas plants. When client companies faced a shortage of funds due to the global financial crisis of 2008, he became interested in Islamic finance as a new way to raise capital.
He is attending INCEIF at his own expense, having taken a yearlong leave of absence from his job. With the clock ticking, he has little time for himself these days. "I have a lot of assignments [from class]," he said. "Too much." He hopes all the effort will pay off in the form of brighter career prospects once he returns to work.
"Especially I am interested in sukuk," he said, referring to Islamic bonds.
Malaysian authorities have thrown their weight behind other educational endeavors, too. The Islamic Banking and Finance Institute Malaysia, another central bank affiliate in the capital, will launch two new programs offering professional certifications in Islamic finance. Marzunisham Omar, assistant governor of Bank Negara Malaysia -- the central bank -- unveiled the plan to the Nikkei Asian Review.
The two certifications -- chartered Islamic banker and chartered takaful practitioner -- are the equivalent of conventional financial qualifications. Takaful, an Arabic word, refers to Islamic insurance. "We would like to elevate the professionalism of talent in Islamic finance," the central banker said.
Learning on the job
Malaysia is not the only Asian country striving to cultivate Islamic finance skills. Brunei wants to nurture talent as it seeks to restructure its economy, shifting from its reliance on exports of oil and natural gas.
Liza Shafiee, 39, has learned on the job and is now assistant vice president for investment at SBI(B), a Shariah-compliant private equity fund management company in Brunei's capital, Bandar Seri Begawan. "During my experiences at SBI(B)," she said, "I have been educated a lot as an expert in Islamic finance."
SBI(B) is a joint venture set up by Brunei's Ministry of Finance and Japan's SBI Holdings. It launched its first fund in 2010 -- a fund designed to invest mainly in private businesses across Southeast Asia, such as Malaysian information technology companies. For the ministry, fostering personnel like Shafiee was a key goal.
The first fund, which was managed mainly by the Bruneian staff, performed relatively well, said Akihiro Yamamoto, managing director of SBI Ventures Malaysia. The joint venture launched its second fund in 2016, drawing investment from the international Islamic Development Bank as well as Brunei's Finance Ministry.
The IDB recognizes the need to build up the foundations of the market and plans to create an Islamic Investment Infrastructure Bank, in partnership with Indonesia, Turkey and Saudi Arabia. Indonesia has expressed strong interest in hosting the proposed bank's headquarters.
The list of players entering the Islamic finance game grows ever longer.
Inspire Corporation, a Japanese investment company, launched a Shariah-compliant fund with investment mainly from Japanese regional banks, the Organization for Small & Medium Enterprises and Regional Innovation, Japan, and a subsidiary of Permodalan Nasional Berhad, a Malaysian government-affiliated fund management company. The fund invests in small and midsize businesses, in Japan and elsewhere, that operate in Southeast Asia.
As the field grows more crowded in Asia, the competition for capable staff will only intensify.