Jeddah, Kingdom of Saudi Arabia [18 December 2016] – Winner of the 2016 Islamic Development Bank (IsDB) Prize in Islamic Banking and Finance, Prof. M. Kabir Hassan, has said that Islamic finance could play a bigger role on the global stage especially towards achieving the Sustainable Development Goals (SDGs).
Prof. Hassan, a Professor of Finance at the University of New Orleans in the United States, spoke during a lecture titled, 'State of Empirical Literature on Islamic Banking and Finance,' organized by the Islamic Research and Training Institute (IRTI) of the IsDB Group.
He said the contemporary global development agenda offers Islamic finance an opportunity to play a vital role to ease endemic poverty and enhance wealth redistribution. This, he explained, can be achieved through profit-and-risk sharing entrepreneurship, home financing, and Islamic social finance instruments of zakāh, awqāf, and ṣadaqah.
According to Prof. Hassan, research has proven that the Islamic financial system operates more efficiently and with greater stability, making it better placed to help in formulating more effective policies for inclusive development.
However, he added that for Islamic finance to play its role successfully there is the need to maintain its "original binding principles", and therefore urged regulators to monitor Islamic financial products to ensure that they meet the criteria of maintaining justice and avoiding gambling and uncertainty.
Speaking on the state of academic studies in the area, Prof. Hassan said lack of reliable data is hindering empirical research, without which the true nature and performance of the Islamic financial sector would not be fully understood.
"In general, there are other potential ways in which Islamic finance can help fulfill sustainable development goals. However, empirical studies to point the way forward are not currently available," he explained.
Prof. Hassan urged the IsDB and IRTI to build on their efforts of collecting and making available comprehensive and credible Islamic finance data for the use of all industry stakeholders.
Earlier in his opening remarks, IRTI Director General, Prof. Mohamed Azmi Omar, said the IsDB Prize was awarded to Prof. Hassan in recognition of his immense contributions to the development of Islamic Banking and Finance. He said the lecture was organized to stimulate critical discourse that could lead to finding solutions to contemporary issues in Islamic Economics and Finance.