Tuesday, July 23, 2013

Don't call it a "loan without interest"

An otherwise unremarkable recent statement by a government minister in Tanzania illustrates one of the difficult challenges with marketing Islamic banking.  Saying Islamic banks offer ‘loans without interest’ is misleading and will almost certainly create disappointment if it induces someone not familiar with Islamic finance to explore financing from an Islamic bank.   This is one example of the importance in describing Islamic banking in terms of what it is, rather than what it is not in order to keep consumers’ attention. 

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