In 2020, Islamic finance assets reached US$2.7 trillion with a 10.7% year-on-year growth. Iran, Saudi Arabia and Malaysia are the leading countries in promoting Islamic finance. The Islamic finance sector, despite having growth, is predominately run by men. On one hand, the world is applauding leaders like Jacinda Ardern, Christine Lagarde, Dr Shamshad Akhtar, Dr Zeti Akhtar Aziz, and on the other hand, there are very few females in leading roles in the financial sector especially the Islamic segment.
Islamic history portrays women leaders in finance like Hazrat Khadija Khuwaylid, who was famous for her knowledge and experience in trade. About half of the world’s population consists of females but only 19% of them managed to obtain decent jobs and very few attain a C-level position.
The reason for the fewer number of females in the Islamic financial sector is due to the lack of support from institutions, governments, regulators and family. Culture is to be blamed as in many countries, men are supposed to work and earn money whereas women have to stay at home and take care of the family.
In Malaysia, 33% of the senior positions are held by women (Thornton International Business Report: Women in Business 2020) compared with Pakistan where 12% of the employed workforce in the financial sector are women.
Islamic finance provides several avenues for women, especially in Malaysia, to join the management of Islamic financial institutions, Shariah advisory committees and boards. The UN Sustainable Development Goal (SDG) 5 is specifically for gender equality and all the governments are committed to providing a level playing field for women in business and finance.
Review of 2021
Regulatory bodies, governments, financial sector and businesses are committed to empowering women as this will bring financial inclusion and lead to prosperity of the nations. In terms of Islamic finance, leading countries in this field have included women in every level of business and management.
Regulatory authorities, for example the Saudi Central Bank, have instructed financial institutions to establish ‘ladies only’ branches, provide financial services to women and give them an opportunity when hiring for the branches and senior management.
The State Bank of Pakistan recently issued a policy that gender diversity must be improved at all financial institutions. It emphasized that banks must develop policies to increase female staff to 20% at the workplace by 2023.
Countries that are already implementing Islamic finance in its true spirit are now working on issuing circulars/notifications for enhancing women participation. However, those that are still in its infancy stage are only focusing on the implementation of Islamic finance rules/regulations.
Preview of 2022
Women participation in the Islamic finance industry is on an upward trend which portrays that more women will be hired at all management levels in the Islamic financial sector and women leaders will come forward for the senior positions either in C-level/board or Shariah advisory roles.
To date, there are no women sitting on Shariah boards in Pakistan, whereas in Malaysia, it is a common practice to have women scholars at the Shariah board or senior level. There is even women representation in the Shariah Advisory Council of the central bank of Malaysia, Bank Negara Malaysia, and the Securities Commission Malaysia.
None of the Islamic banks in Pakistan have women as CEOs or deputy CEOs. This gives an ample opportunity for women to come forward and break the glass ceiling.
2022 seems to be a very optimistic year for the increased role of women in the Islamic finance industry but support from the regulatory authorities, governments and financial sector institutions is a must.
When you see SDGs, Islamic finance and women empowerment, then there are several commonalities. Islamic finance promotes diversity and success for specially women.
Women representation in leadership roles in the Islamic finance industry is restricted with very few holding positions such as CEOs in Islamic banks or positions of influence. Even though the regulators have taken great initiatives to increase female empowerment, however in terms of employment, this will not be an easy task until every individual takes responsibility to work for this cause.
Islamic finance has an advantage as it is for all and provides opportunities to women. Some of the most common reasons as to why women do not work in the industry are: lack of education, family pressure/strictness, gender biasness, unsafe environment and cultural issues.
To see more women in leading roles in Islamic finance, we need to educate people about the rights of women and the teachings of Islam. The government must take the responsibility to encourage and appreciate the efforts of women who are already working hard in the Islamic finance field.
Companies must take responsibility to encourage women to take up decision-making roles and provide them a conducive environment. Facilities such as daycare centers, safe office transportation and user-friendly workplaces should be provided to female employees that will help remove their fears.
Businesses in the Islamic finance industry should provide special perks to women employees who bring innovative ideas to the table or are employed for a long period of time, such as women leader awards. This will encourage women to stay in the industry for a longer period.
The Islamic finance industry has the potential and if governments and regulatory authorities take the initiative to make women as part of this cause, there will be a stronger growth as it is proven in countries that are already on the Islamic finance bandwagon.
Dr Irum Saba is the associate professor and program director of the MS Islamic banking and finance program at the Institute of Business Administration, Pakistan. She can be contacted at [email protected]