Situs Resmi DPP IAEI - Contact Center 021-3840059
[Call For Paper] Forum Riset Ekonomi dan Keuangan Syariah 2019 | Universitas Gadjah Mada, Yogyakarta | INFORMASI FREKS 

Islamic economics and finance education in the Kingdom of Bahrain

Updated: Kamis 9 Juli 2015 - 15:50 Kategori: Ekonomi Syariah Posted by: Ricky Dwi Apriyono

Islamic finance is one of the fastest-growing industries. The industry has been growing rapidly from its appearance in the late 1960s and it has changed from being only a rural banking system at the beginning into a complete financial system since the 2000s. A remarkable growth of the industry happened between 2006 and 2013. During that period, the compound annual growth rate (CAGR) of the industry stood at 16% and as a result, by the end of 2013, total global Islamic fi nance assets stood at US$1.3 trillion. DR SUTAN EMIR HIDAYAT provides an overview of the Islamic economics and finance education landscape in the Kingdom of Bahrain. 

Despite the convincing facts, there are several challenges that need to be tackled to move forward. One of the challenges is the lack of human capital. There are many studies which found that education plays an important role in solving the lack of human capital. It is very important to note that the sustainable growth of Islamic finance depends on the availability of talent to meet the industry’s needs. The lack of adequately trained human resources within Islamic fi nance can only be overcome by producing more qualified people through the educational system.

A survey conducted by Finance Accreditation Agency (FAA) and IFN in 2014 on human capital development within the Islamic finance industry indicated that 75% of the respondents believed that practitioners without a formal Islamic fi nance qualifi cation are less capable of doing their job than those with a formal education. In conclusion, the industry is still in need of more qualified people to boost its growth.

The issue exists in almost all countries where Islamic fi nance is implemented including the Kingdom of Bahrain. Bahrain is known as one of the world’s Islamic financial centers. The Central Bank of Bahrain (CBB) through its comprehensive regulatory framework has opened its gate to local and international Islamic fi nancial institutions to operate in the country. The Kingdom is also the host to several organizations central to the development of Islamic finance, including: i) AAOIFI ii) the Liquidity Management Center iii) the International Islamic Financial Market and, iv) the Islamic International Rating Agency. The financial services sector is among the highest contributors to the country’s overall GDP representing around 27% of the GDP of the country. In addition, financial services is the largest sector that absorbs the workforce in Bahrain. Up to September 2014, the number of financial institutions in the country is 404 and the total workforce is 14,009. Out of this, Islamic financial services represent around 12-18% of the market share. 

In order to support the development of Islamic finance in the Kingdom, human capital development is vital. Realizing the importance of human capital, CBB has established a special fund to finance research, education and training in Islamic finance (the Waqf Fund). In addition, three accredited higher learning institutions in the Kingdom, namely the University College of Bahrain (UCB), the University of Bahrain (UoB) and the Bahrain Institute of Banking and Finance (BIBF), are off ering Islamic economics and finance (IEF) education and training within their academic curriculum. In terms of Islamic economics and fi nance (IEF) education, the Kingdom of Bahrain is categorized as a country where IEF education is well established during the Islamic Economics and Finance Education Symposium held in Doha on the 23rd March 2015 by the International Association of Islamic Economics and Finance, the IDB, and the Qatar Faculty of Islamic Studies.

In UCB, Islamic finance is only contained in both the Bachelor and Master of Business Administration programs which are under the Department of Business Administration. In UoB, the Islamic finance program is only at the undergraduate level under the College of Business Administration. In BIBF, the Islamic finance programs come under the Center for Academic and Executive (University of Bangor’s diploma in Islamic finance and De Paul University’s Master of Science degree in Islamic fi nance) and the Center for Islamic Finance (advanced diploma in Islamic finance, advanced diploma in Islamic commercial jurisprudence, diploma in Islamic finance from the Chartered Institute of Management Accountants and the Islamic finance qualification).

In UoB’s case, it is quite different since the program is relatively new as compared to the other two institutions. UoB’s Islamic finance undergraduate program is focused on Fiqh which is intended to prepare students primarily those seeking to fi nd career opportunities in Shariah departments and in the areas of Shariah review and Islamic product development. Until now, none of the institutions offers a PhD program in Islamic finance.

In terms of funding and scholarships, only UCB provides them at the institutional level (full and partial scholarships for Bahrainis). However, BIBF and UoB have a very good relationship with the Waqf Fund of the CBB. Individuals working for Islamic financial institutions get funding from the Waqf Fund to enrol in the Islamic finance programs at BIBF. In UoB’s case, the Waqf Fund provides financial support for its four-year Bachelor’s degree program in Shariah for banking and finance. The support has so far been used to develop the curriculum design. 

In terms of accreditation, all three institutions are accredited by the Higher Education Council of the Ministry of Education in Bahrain. The three institutions acknowledge the importance of international accreditation. For example, UCB is currently in the process of obtaining full accreditation from the FAA for its MBA program in Islamic fi nance. This is in addition to the application made by UCB for the Association to Advance Collegiate Schools of Business (AACSB) accreditation for all programs in the Business Administration Department (in progress). The same applies to UoB where the College of Business Administration is also seeking AACSB accreditation (the Department of Islamic Banking is part of the College of Business Administration).

Despite the aforementioned convincing development in IEF education in Bahrain, there are still several challenges and problems faced by IEF education providers in the Kingdom. Among them are the lack of textbooks and supporting materials for Islamic fi nance-related subjects and limited career opportunities for Islamic finance graduates. In addition, the lack of close collaboration between the industry and Islamic finance education providers is also another problem in the implementation of IEF education. As a result, there is a mismatch between the att ributes of Islamic finance graduates and the specialization that the industry needs. Therefore, there is a need for greater coordination and cooperation between the course providers and the industry practitioners in the Kingdom.

A closer networking and support mechanism has to be put in place. Offering a standardized IEF international qualifi cation that exists globally, which is equivalent to the CFA Institute for example, becomes a need. In addition, integrating research and teaching more closely is also very important since many programs are mushrooming without a proper foundation and linkage with research. The first step would be to encourage the faculties to conduct research-related activities and include them as a part of their key performance indicator or annual appraisal. Embedding research skills into Islamic finance graduates is also vital to support the sustainable growth of the industry. 

Source : IFN Special Report 1st July 2015



comments powered by Disqus