My research on the factors and actors shaping Islamic finance led me to interview Islamic finance lawyers, bankers, regulators and shariah scholars across the world. As my fieldwork progressed, I noticed a trend. Islamic finance is best described in metaphors. To say what Islamic finance is, it was easiest to say what it was like.A Saudi regulator told me: ‘Islamic finance is like wearing a long beard and thobe rather than being clean shaven and in a suit and tie. It’s a reassertion of Islamic identity.’ Asked about transaction costs, an Islamic banker said: ‘It’s cheaper to get married at the registry office, but many still prefer a religious wedding.’
Asked about the difference between Islamic and conventional banking products, a member of the Islamic Development Bank said: ‘It’s the difference between legitimate and illegitimate children. They are both children, but one is born of sin.’ A shariah scholar told me: ‘Islamic finance is like a permanent cure for cancer that is being ruined by the pharmaceutical industry so it can stay in business. The conventional finance industry’s involvement in Islamic finance is the same.’
To me it seems Islamic finance is like paying a premium for a sausage that has been stamped as halal. You are relying on a label in an attempt to fulfill your religious obligation and don’t really want to know how the sausage was made!