Growth of women in Islamic finance remains a challenge

Posted by: Ruby Hung

Growth of women in Islamic finance remains a challenge

By MUSHTAK PARKER | ARAB NEWS

Published: Mar 13, 2011 22:45 Updated: Mar 13, 2011 22:45

The growing role of women in Islamic finance resurfaces on the conference circuit now and again, albeit organizers are often under the illusion that they have invented the subject. Not surprisingly, the issue has been discussed at recent conferences, but whether any new thinking has emerged remains a moot point.

Many women have and are still contributing to the development of the contemporary Islamic finance movement, and yet their contribution, except in countries such as Malaysia, has largely been marginalized by an industry that is still dominated by middle class men.

The issue of gender equality and empowerment is one that affects all societies whether in the West or East. Women in Switzerland only got the vote in the late 20th century. The issue of unequal payment for the same jobs in the City of London, one of the world's largest financial centers, is still entrenched. The number of women on the boards of FTSE 100 companies is still woefully low.

Despite the stereotypes of women in Islam, there have been many Muslim women who have excelled in almost every sphere of life. Some of these include, Princess Fakhrelnissa Zeid, the famous painter from Turkey/Jordan who established herself in Paris, Sadika Sabanci, the matriarch of a business family and philanthropist and educationalist in Turkey, Siti Dr. Hasmah Mahathir, one of the first Muslim women doctors in Malaysia, and Professor Fatima Meer, the well-known South African academic, anti-apartheid campaigner and official biographer of Nelson Mandela.

In financial services, Malaysia is unique in the world in that its two financial regulators are both women of substance. Zeti Akhtar Aziz, the governor of Bank Negara Malaysia, the central bank, is one of the most experienced central bankers in the world and has been named as “Central Banker of the Year” for 2009 and 2010 by Global Finance magazine. Zarinah Anwar is the chairman of the Securities Commission of Malaysia, the securities regulator, where she has inter alia put Islamic capital markets firmly on the global map through her work in Malaysia and in international organizations such as IOSCO (International Organizations of Securities Commissions).

While the current debate on the role of women in Islamic finance tend to concentrate on how many women are actually working in the sector and their individual experiences, very often the underlying issues are avoided for fear of touching on sensitive issues.

At the “Women in Leadership Forum” in Kuala Lumpur last week, in her keynote speech titled “Advancing Women's Leadership in Public Life: Power Sharing in the Public Sector,” Zeti spelt out her scenario for the future in gender equality and engagement.

“In this 21st century," she stressed, "it is human capital rather than physical capital that will define performance and progress. Women represent half of the world population and therefore half the potential resource that can drive such performance. This is reinforced by the more recent trend that increasingly, the majority of those with college education are women. Increasingly, therefore, this group represents a more significant resource potential that can rise to leadership positions. In emerging economies, where such high-powered talent is scarce, gender has not been of an issue. Women have risen to leadership positions based on their merits and capabilities.”

Women in Malaysia, she reminded, have made significant strides in their participation in all segments of the Malaysian economy and have demonstrated their ability to lead and to succeed in both the public and private sectors. In Asia, in particular, women have risen to key positions and have been given the opportunity to contribute to the nation's progress and development.

Zeti stressed the vital role of the leadership in the public sector where there are tremendous opportunities for women with the capabilities to take on leadership responsibilities in the public sector.

But, for a woman who is a mother, wife and daughter, the sacrifice involved is great. The challenge, she added, will be to achieve a balance so that work performance is not being adhered at all cost. Support systems at the work place and at home are vital.

While women are a growing force in the talent pool, “the real power will be a shared power. It will be women and men working together leveraging on each others comparative strengths, experience and knowledge that will allow us to make the difference that best suits our circumstances and that is able to bring us to the best level of performance and progress.”

It is important that the role of women in Islamic finance must be seen in much wider context. In many Muslim countries there still persists a conservative religious establishment (in some societies it is ultra-conservative) where the empowerment of women outside the kitchen and house is anathema. Many governments, including royal families, are reluctant to take on the religious establishment, for fear of losing their support. However, it is important to stress that the degree of gender equality changes from one country to the other.

Gender is also well demarcated in politics, economics and society. Gender separation in Saudi Arabia for instance is entrenched as part of the culture whereas in most other Muslim countries there is no separation. This of course is reflected in the jobs market. However, separation is not a pre-requisite for discrimination, which is against Islamic principles. There is the CEO of a Malaysian Islamic financial institution who had to use the backdoor of a bank in Kuwait and Saudi Arabia because she was not allowed to use the front door used by males.

Male dominated societies are in some respects driven by male insecurity about competition in the employment market, in educational achievement, in alienation from society and in a lack of engagement by various stakeholders.

The reality is that given the pressures of everyday life and economic demands, many households can no longer cope on the salary of one breadwinner, usually the man in the house. Even in Saudi Arabia today, many women are forced to work because of economic necessity, albeit not necessarily the job of their choice.

The progress toward gender equality and empowerment in many Muslim countries remain piecemeal at best. There are legendary examples of Saudi and GCC women deprived of getting the top jobs in their countries simply on the basis of gender. On the other hand there are the usual celebrated business women who are running top companies but by virtue of the fact that they are usually owned by their families or they are the women's division of a bank or company. They are exception to the rule and not the yardstick.

Gender separation is not the solution because it is an unwarranted duplication, which has a huge economic cost even in oil-rich countries such as the GCC states. In South Africa, for instance, there was similar wanton duplication but based on racial groups which cost the Apartheid state billions of dollars to sustain.

The Islamic finance sector is a microcosm of society as a whole. Unfortunately the role of women in the industry is reflected in this way. Given the fact that there are over 600 Islamic financial institutions (IFIs) in the world, the number of CEOs of these IFIs count a mere handful and almost all of them are in Malaysia, which is by far the most proactive in gender equality and empowerment in government, regulation, financial services, business, law firms, Shariah advisories etc. These include Jamelah Jamaluddin, CEO of KFH (Malaysia), the first time that a Kuwaiti financial institution has appointed a woman as a CEO, albeit a foreign subsidiary. Others include Fawziah Amanullah, CEO of EON Islamic Bank; and Noripah Khamso, CEO of CIMB-Principal Islamic Asset Management Berhad.

The Islamic finance industry in general should be held to account for the lack of engagement and also for promoting gender equality and empowerment. There are some rays of hope. The Islamic Development Bank (IDB) now employs some female secretaries, but its women in development panel and prizes are a mere fig leaf for a policy that tolerates and acknowledges the role of women in development in finance up to a point but in reality is a dereliction of duty toward gender equality and empowerment in its member countries and its own organization. As one Malaysian banker recently stressed, “Why can't the next IDB president or head of Treasury be a woman?”

Of course there are women (like men) of many faiths who have been involved in the development of Islamic finance over the years, and it would be a disservice not to acknowledge their contributions. Stella Cox, CEO of DDCAP Limited, the Islamic finance intermediary and brokerage company; Sarah Gooden, partner of Trowers & Hamlin, the international law firm; Baljeet Kaur, CEO of KFH Research, and a host of others.