Tehran (IQNA) -According to the principle of secularism in French law, lawmakers cannot establish specific rules for Islamic finance. That could be a major challenge for Sharia-compliant services in France.
However, the morality of Islamic finance attracts non-Muslims who choose this sector for their economic activities.
One of the problems that Muslims face in non-Muslim countries is the non-Islamic financial and banking system of these countries, which has led some Muslims to use as little as possible the economic services provided by the banking and investment system. Some Muslims don’t even use regular banking services.
Despite the obstacles of traditional non-Islamic financial markets, the Islamic financing sector has acquired a good position in the main European financial markets.
Although the total volume of Islamic financial assets is still limited and the European share of global Islamic financial assets is marginal, sectors related to Islamic banks and Sharia compliant investment funds in Europe have made significant progress.
In 2014, Islamic banking accounted for 0.5% of total Islamic assets worldwide. The development of Islamic financial resources in Western countries is indicative of the strong demand from wealthy Muslim clients for Sharia compliant deposit facilities and fund management services.
The global financial crisis of 2007-2008 and the outbreak of the epidemic in 2019 caused a widespread recession in Europe, as in other parts of the world, which has led to a growing interest in alternative financial methods to the current system. ball.
With a population of over 66 million inhabitants, France is the second most populous country in Western Europe after Germany and one of the most important members of the European Union in terms of economic, political and defense weight. Due to its colonial history in North Africa, it maintains trade relations with its African Muslim neighbors. A significant portion of the French population (more than 5 million people) is from North Africa, which has increased the demand for Islamic financial services in France.
More than half of French Muslims are interested in Islamic law-compliant bank loans to finance their homes, cars and businesses. On the other hand, the purchasing power of French Muslims, who come mainly from the middle class, allows the banking system of this country to attract capital.
In this market, the company capable of supplying sharia compliant products has great potential for development and growth in the domestic market. The halal market and products compliant with Islamic law, and their success on the French market, are an opportunity for the development of Islamic financial services such as Takaful (Islamic insurance system). On the other hand, the history of Muslim immigration to France shows that most immigrants do not want to return to their country of origin, and intend to stay in France, which increases the demands for investment in real estate, employment and education.
While there are no barriers to Islamic finance in France, its picture is unclear and customers need to be informed about its services which are generally complex at first glance.
The second problem is the lack of support for the Islamic financing system in France. In 2008, when Christine Lagarde, then Minister of Economy and Finance, argued for the presence of the Islamic financing system in France, government support was very inadequate.
Political support is a determining factor in the development of any industry and in most Western countries where Islamic financial resources have increased significantly, governments have shown their support by passing new laws.
Another factor in the slow development of the Islamic financial system in France is that the Islamic financial market in Muslim countries such as Algeria, Morocco and Tunisia is relatively underdeveloped and faces many structural problems.
In the area of Islamic finance teaching in French universities, despite the efforts that have been made, this area suffers from a shortage of specialized personnel. Currently, only two French universities have masters in Islamic finance. There are other reasons for the insufficient development of Islamic finance in France, which is the lack of foreign investment in this area by foreign banks and the negative opinion of some French who consider the services provided by Islamic financial institutions as a ‘ opposition to integration.
However, the future of Islamic finance in France is very encouraging. The growth of the Muslim population on the one hand, and the provision of financial services that guarantee compliance with social standards on the other, have increased the interest of the French market for foreign investors, especially banks and financial institutions in the Gulf. .Persian.
On the other hand, the evolution of the Islamic financing system during the economic crises has shown that the economies of dynamic countries such as France could make good use of the capabilities of this large world market.