GK Partners, advisers to socially responsible business, and the IIBI are to organise one-day workshops on ‘Access to Islamic Finance’ at The British Library. The last two workshops, held in December 2008 and February 2009, were very successful.
The next workshop will be held on 27th April 2009, followed by one every two months until end of 2009. The programme explores Shari’ah-compliant financing options available to small and medium size enterprises (SMEs) in the UK. This sector of the economy is badly affected by the current financial crisis, due to the decrease or non-availability of business credit from conventional banks.
The workshops start with an introduction to Islamic financial principles compared and contrasted with conventional finance. The main prohibitions in Islamic finance such as riba (interest), gharar (excessive risk or uncertainty) and maysir (gambling) along with other prohibited activities are discussed.
The workshops draw attention to the strong parallels between ethical or socially responsible investments and Islamic investments. In both cases, business, financial and social screening criteria are used to exclude companies which contravene the underlying ethical and Shari’ah principles. The main types of equity investments, such as musharakah and mudarabah, and debt-based financial structures such as murabaha, ijara, salam and istisna are introduced. To reinforce understanding of Islamic contractual structures and the state of the sector in the UK, participants are given role-play exercises for them to analyse and explain the structural nature of the different types of Islamic commercial and personal finance products available in the UK.
The final session of the workshop broadly outlines the key principles for preparing business plans suitable for raising finance from Islamic financial institutions. Each workshop has a maximum of 20 participants.