Islamic Finance
in the current economic environment
Research conducted by:
Muriel Sandrine Junaideen
This survey is part of a research into Islamic Finance to find out whether this method of finance can be a
viable alternative or complementary financial system for the current global economic environment. It
also seeks to find out the attitudes towards Islamic Finance in the UK which has now become the hub of
Islamic Finance in the west.
It is argued that one of the major causes for the current financial crisis is the lack of adequate market
discipline in the financial system resulting in excessive lending, high leverage and products like
derivatives and options. Risk-sharing, which Islamic finance wishes to introduce, can help instil greater
discipline in the system and curb lax lending.
Please answer the questions freely. You will not be identified from the information you provide, and no
information about individuals will be used without your consent in the research paper.
All the information you provide will be treated in the strictest confidence
The questionnaire should take you about 15 to 20 minutes to complete. Please answer all questions to
the best of your knowledge as your answers are essential in building an accurate picture of this system
of finance.
Return of the questionnaire
Please return the filled-in questionnaire before March 15, 2010 via email to
murieljunaideen@gmail.com or via fax to (+94) 719 378 660.
Please send additional information if you can to my mail: murieljunaideen@gmail.com
If you have any questions concerning this study or the completion of the questionnaire please contact
me on my mail which is: murieljunaideen@gmail.com
I hope you find completing the questionnaire enjoyable and thank you for your help.
Respondent Contact Information
Please fill in the blanks:
Name of respondent: ____________________________________________________
Position title (Function): __________________________________________________
Tel.:____________________________________________________________________
Fax: ____________________________________________________________________
Email: __________________________________________________________________
For your subsequent assessment of the industry and market environment, please
indicate the geographical area you are currently residing:
Bahrain
Kuwait
Dubai
Saudi Arabia
GCC area
Malaysia
Pakistan
South East Asia
UK
Other (please specify):_______________________________________________
Questionnaire Part One
Please answer this questionnaire with a simple YES /NO or a short answer:
Please highlight your answers in red when responding by mail.
Q.1 - Are you aware of Islamic Finance?
A- Yes.
B-No.
Q.2 - Are you aware that the Quran prohibits the receiving or paying of Interest (for example Interest
gained from a savings account)?
A- Yes.
B-No.
Q.3 - Would you be willing to deposit your money or take Islamic finance from an Islamic bank rather
than a conventional bank?
A- Yes.
B-No.
Q.4- Do you know all types of Islamic finance:
A- Yes.
B-No.
D- Some of them.
If your answer is yes, please tick the methods you are familiar with:
a.) Mudaraba
___
b.) Musharaka ___
c.) Ijara
___
d.) Salam
___
Q.5- In your opinion, what is the cause for the recent global financial crisis? (Please select an option or
give a short answer):
A- Excessive lending.
B- High interest rate.
C- Trading in derivatives.
D - Speculative.
E- Short answer:
Q.6-Do you think that the Islamic financial system could be a solution to this crisis:
A- Yes.
B-No.
If yes, please indicate how:
Q.7- Do you agree that Islamic institutions survived in this crisis:
A- Yes.
B-No.
c-Somewhat
Q.8- Do you agree that entrepreneurs by associating themselves with Islamic banks will become more
ethical in conducting their business:
A- Yes.
B-No.
Q.9- Do you agree that the goal of Islamic banks is not limited to maximisation of shareholders’ wealth,
but also includes enhancement of the standard of living
A- Yes.
B-No.
Q.10- What do you think about the rate of return in Islamic finance comparing to conventional finance:
A- More.
B- Equal.
C- Lower.
Q.11- Do you think that Islamic banks differ from conventional banks only in the name of their services:
A- Yes.
B- No.
Q.12- Do you think that Islamic banking products and services available are similar to the products and
services of conventional banks, except that the banks use different names to name those products.
A- Yes.
B- No.
Q.13- Do you think that the Islamic financial system offer sufficient financial products and instruments
to satisfy consumers’ needs?
A- Yes.
B- No.
Q.14- Do you think that Islamic insurance (Takaful) is better than conventional insurance:
A- Yes.
B-No.
Q.15- Do you support a full-fledged Islamic financial system (like Iran & Sudan) or a mixed financial
system (like Bahrain & Malaysia):
A- Full-fledged.
B- Mixed.
Please give an explanation for your choice:
Q.16-How long do you think this system of finance could take to prove its viability internationally?
A- Less than 10years.
B- Between 10-20years.
C- More than 20years.
Q.17- What do you think are the obstacles that Islamic Finance is facing (rank it):
A- Legislations & regulations.
B- Human resources.
1
C- Public acceptance
E- Underdeveloped system
F- Other (Please specify):
D-Public awareness
2
3
4
Q.18: Do you think that Islamic financial system could be a viable alternative to the current financial
system and why?
A- Yes.
B-No.
Please give an explanation for your choice:
Questionnaire Part Two
Q.1- Please indicate how you view the importance of the following factors affecting the Islamic
Finance Industry:
(1-7: 1=not important, 7=very important)

Disintermediation
______

Sophistication of banking information technology
______

Decrease of long-term customer-relationship
______

Increased competition and cost pressure
______

Deregulation
______

Innovation
______

Other:_______________________________________________
Q.2- In most countries, Islamic Banks (IBs) are in competition with conventional banks.
Please indicate to what extent you disagree or agree.
(1=strongly disagree…7=strongly agree.)
Compared to conventional banks or financial products…

…IBs benefit from higher market growth rates
____

…Islamic products can be priced more expensively
____

…IBs have easier access to shareholder’s equity
____

…IB’s have easier access to capital (deposit or funding)
____

…IBs are exposed to lower risk(e.g. borrower default risk) ____

…IBs incur lower funding costs
____

…IBs incur lower operation costs
____

…IBs gain higher profit margin
____

…IBs benefit from a larger market size (cater to both conventional and Islamic investors)___
Q.3- When evaluating the various forces shaping the Islamic finance industry, please indicate
for each of the following statements to what extent you disagree or agree. Please refer to your
own geographic focus.
(1=strongly disagree…7=strongly agree)

Competition in the industry is very high
____

The clients have a strong bargaining position
____

Clients prefer short-term deposits & Investments
____

Most clients regard conventional banks as substitutes for Islamic bank
____

The industry’s liquidity market is too restricted
____

The industry’s regulatory & legal framework could improve
____

There is lack of standardization of Sharia opinions
____

The industry’s capital market is underdeveloped
____

There is not enough attractive profit-and-loss sharing investment opportunities ____
Q.4- In your opinion, what principal goals does Islamic banking pursue? (Multiple answer
possible- Please rank your answers 1-7)

Providing highest-standard banking services
____

Developing the economy
____

Maximizing profits
____

Promoting the precepts of Islam
____

Maximizing the shareholder value
____

Promoting social welfare
____

Encouraging people to save & invest
____

Other:____________________________
Q.5- How would you rate Islamic finance and banking strength relative to conventional banking
for each of the following?
(1=much weaker than conventional banks…7=much stronger than conventional banks)
Organization Structure & Communication

Clearly structured roles and responsibilities
____

Vertical communication
____

Cross-functional information exchange
____

Cross-functional co-operation
____

Team-based approach
____

Market-oriented organization
____
Management Quality

Managerial competencies
____

Quality of Leadership
____

Clear strategic vision
____

Strategic implementation
____

Effective resource management
____

Knowledge and skills of employees
____
Product development

Innovation
_____

Technological expertise
_____

Technological capabilities and equipment
_____

Resource efficiency
_____

Know-how of both Islamic & Financial market requirements
_____

Quick & efficient Shariah-approval process
_____
Marketing and Sales

Reputation as financial services provider
____

Brand image
____

Placing power
____

Market knowledge
____

Reputation as Islamic banking
____

Information Processing capabilities
____

Control of and access to distribution channels
____

Advantageous relationship with customers
____

Engagement in socially beneficial activities
____

Current customer base
____

Branch network
____

ATM network
____

Internet banking
____

Call center
____

Deal and customer assessment
____

Customer counseling
____

Private equity/venture capital expertise
____

Response time to customer requests
____

Financial expertise Shariah board reputation
____

Service quality
____

Technological expertise
____

Technical capabilities and equipment
____

Resource efficiency
____

Quick & efficient Sharia-approval process
____
Transaction Processing

Service quality
_____

Securization of investment products
_____

Technological expertise
_____

Technological capabilities and equipment
_____

Resource efficiency
_____

Trading and treasury
_____
Steering and Supporting Functions

Shariah compliance
_____

Effectiveness and efficiency of Shariah board
_____

Strategic planning
_____

Controlling
_____

Risk management
_____

Research capabilities
_____

Asset quality

Equity base
_____

Knowledge and data management
_____

Compensation and reward system
_____

HR processes and administration
_____

Use of strategy-enforcing tools (e.g. balanced scorecard)_____

Access to short-term capital
_____
Thank you