Sharia Finance Growing In NZ, but not Big Enough to Change Banking Compliance Mechanism

New Zealand’s Muslim population is not big enough to see a growth of Shariah-compliant banking options, the industry experts say.

Islamic banking, or Sharia finance, is governed by the principles of Islam.

According to Islamic law, you can’t use money to make money – it has to be from legitimate trade. It is prohibited to accept interest or fees for loans of money.

Muslim rugby player Sonny Bill Williams covered the BNZ logos from his Blues jersey while playing over the weekend, as a conscientious objection to the bank.

In New Zealand there are currently no banks operating according to Sharia law.

“I’m not aware of any banks in New Zealand that offer Islamic finance which will be compliant with Sharia law,” Ikhlaq Kashkari, president of the New Zealand Muslim Association said.

Kashkari said many Kiwi Muslims got around this by either having interest-free bank accounts, or donating generated interest to charitable organisations.

“What a lot of Muslims do is basically either not put money in an account that is interest-bearing or, take the interest, put it separately and donate it to charitable organisations or causes, with a view that it is best to use this money for charities and people in need.”

The Muslim population in New Zealand is approximately 50,000, with 35,000 living in the Auckland region.

Managing director of Sharia-approved KiwiSaver fund Amanah Ethical Brian Henry said there was demand for Islamic finance in New Zealand, but simply not a big enough population.

Originally published on www.nzherald.co.nz