To increase the number of finance and thus qualified professionals in the field, education providers have attempted to introduce Islamic finance programs and courses, particularly over the last two decades. According to a recent report, there are currently 1,008 institutions worldwide that offer degrees and courses in Islamic finance. Malaysia and Indonesia are leaders in the education sector.
Upon analyzing the historical development of Islamic finance in these countries, we find different approaches. The common feature of the emergence of Islamic finance education is that it follows the introduction of Islamic banks. For example, in Indonesia, the first Islamic bank was founded in 1992 as a private initiative, and only after 10 years it was realized that the main obstacle in front of the development of the Islamic financial system is the lack of human resources. In Malaysia, on the other hand, the first Islamic bank was established in 1983 as a government initiative.
However, it is noteworthy to see that these two countries adopted two different approaches when it comes to the inception Islamic finance education. In the case of Indonesia, for example, Universitas Airlangga started Islamic finance education at the PhD level and followed up with undergraduate and Master’s programs. Meanwhile, in Malaysia, the inception of Islamic finance started with the introduction of the course in 1991 with the same objective — to address the lack of human resources and followed up with the introduction of undergraduate programs.
Review of 2022
A number of conferences, online and face to face, were conducted in 2022 to address the importance of Islamic finance education, particularly at the undergraduate level. To the question of ‘Why do we need Islamic finance education at the undergraduate level?’, firstly we need to look at the nature of Islamic finance as a discipline. Islamic finance is a multidisciplinary phenomenon therefore it is difficult to focus solely on economics or finance or Shariah law, hence the introduction of the program depends on the objective of the industry.
It is argued that Master’s programs are designed to produce graduates with good operational skills while undergraduate programs are designed to produce thinkers, hence game changers in this field, because only Islamic finance education at the undergraduate level can develop basic theories in economics, Islamic economics, finance, Islamic finance, accounting, Islamic accounting and Fiqh Muamalat.
For instance, if we examine a standard Islamic banking and finance curriculum with the nomenclature of ‘Banking and Finance’ at the Bachelor’s level, we can expect the four-year program to produce graduates who have been exposed to various aspects of banking and finance.
After analyzing the structure of various curricula, for the purposes of this study, any program that aims to provide Islamic banking and finance education must include courses in at least six of the following domains:
1. Banking and finance
2. Economics
3. Management and marketing
4. Accounting and governance
5. Shariah and law, and
6. Others including Islamic truth.
There are also some advantages for students who graduated from Islamic finance at the undergraduate level. Firstly, when the students continue their education at the postgraduate level, they are not required to take prerequisite courses unlike students with other backgrounds.
Preview of 2023
Public universities in Malaysia have more than 30 academics in Islamic finance education, accounting for approximately 55% of all academics in Islamic finance. Private universities are smaller and less at the forefront of Islamic finance education.
In terms of areas of specialization, this study collected data from the academics themselves, where academics stated their areas of expertise or specialization based on the ICIFE domains (Figure 1).
Conclusion
To date, there are a total of 89 Islamic finance programs offered by all public universities in Malaysia and three selected private higher education institutions in Malaysia. Most of the programs (75 programs) are offered by 11 public universities while three selected private higher education institutions offer 14 of the programs. The private higher education institutions offer the highest number of programs (27 programs).
Based on the programs offered, the Islamic finance domain has the greatest number of programs (33) compared with other domains and accordingly, the student enrolment and graduation in this domain recorded the highest number within the Islamic finance program. These institutions offer Islamic finance programs at all education levels (diploma, Bachelor’s, Master’s and PhD). Master’s degree programs are the most popular with 44.22% of the total programs offered in Malaysia. This is followed by Bachelor’s degree programs (27.37%) and PhD programs (23.16%).
Most of the Islamic management and Islamic economics programs are offered at the Master’s and PhD levels. A total of 196 Islamic finance graduates working in various sectors were asked about their skills and competencies. The Master of Islamic Finance (MIF) graduates include holders of PhD, Master’s and Bachelor’s degrees in the five domains, namely Muamalat, Islamic finance, Islamic economics, Islamic management and accounting.
The skills measured consist of interpersonal skills, computing skills, entrepreneurial skills, communication skills, thinking skills, managerial skills and language proficiency. The result reveals that overall, MIF respondents scored above average on all skills and competencies they have acquired upon their graduation with mean scores of 5.14 with the exception of low proficiency in the Arabic language.
In other words, on average, Islamic finance graduates are similar to other graduates in other disciplines, where they are equipped with employability skills and competencies that the job market requires.
Dr Kamola Bayram is an associate professor at KTO Karatay University, Turkiye as well as a project consultant and advisor for project management at the International Council of Islamic Finance Educators. She can be contacted at [email protected].