Seminars, forums, roundtables, and conferences, led by jurists, tax specialists, bankers, and academics, succeed in calling for the integration of a finance, which operates entirely in accordance with Sharia (Islamic law), in French regulations.
All participants plead for Islamic finance, particularly described as "ethical" because it prohibits usury (riba), speculation and "illegal" investments (weapons, alcohol, gambling, pornography ...), and because it is anchored to the real economy, which had spared it from the crisis, caused by the real estate and financial debacle in the United States, which had shaken the world in 2008.
Last March, seven speakers, including two Saudi academics, took turns at a "Franco-Saudi Forum for Dialogue between Civilizations" hosted by the Sorbonne in Paris, to examine the fundamentals of Islamic finance.
Mr. Alain Couret, a law professor at the Paris 1 University, showed that “there is no gap between Islamic finance and French law, with respect to its secular nature, because it is of Christian essence and it bears traces of prohibitions common to monotheistic religions, including those of usury, and speculation, and it supports the idea of sharing, with France being a country of insurance and complementary “mutuelle” plans.”
"So with a few legal adjustments, we will be able to accommodate this type of financing, making Paris the European capital of Islamic finance," a wish dear to the hearts of French decision-makers, which will permit them to grab the title from London, the only EU capital to legislate in favor of Islamic finance, in 2006.
"A lifesaver" for SMEs
Mr. Anwar Hassoune, vice president of “Moody's Investors” and lecturer at the Paris-Dauphine University, notably demonstrated that “Islamic finance is not likely to cause communitarianism, and it is not linked to terrorism, but it emphasizes moral values.”
“Through Islamic banking, we can find the necessary funds to help SMEs (Small and medium enterprises) and provide them with a ‘breath of oxygen’,” he said, recalling the words of the MEDEF’s (Movement of the French Enterprises) president, Laurence Parisot, who warned, in September 2009, that “if we keep the pace we witnessed at the beginning of the year, nearly 70,000 enterprises will disappear in 2009 and, with them, hundreds of thousands of jobs.”
Nevertheless, Mr. Hassoune welcomed the commitments made towards the integration of Islamic finance in France, particularly the creation of the French Institute for Islamic Finance (FIIF), chaired by Mr. Hervé de Charette, former Minister of Foreign Affairs and Chairman of the Franco-Arab Chamber of Commerce. There was also the establishment in Paris of the first “Sharia board”, an ethics committee whose mission is to validate products in conformity with the principles of Islamic finance, not to mention the introduction of a specialized training course at the EM Strasbourg Business School (Ecole de Management Strasbourg ) and at the Paris-Dauphine University.
“Progress too slow”
However, despite France’s enthusiasm for Islamic finance and the displayed political will to make Paris its European capital, Mr. de Charette confessed that “the progress is too slow.”
“I have identified three obstacles in France: French inertia against any change, the risk of competition for French banks and fears of French society,” said the tenor of Islamic finance last December, at the 3rd French Forum of Islamic Finance, during the announcement of FIIF’s creation.
Mr. Hadi El-Assaad, FIIF’s president adviser, furtherly discussed this point at a dinner-debate, held on the 13th of April by the «Club des Exportateurs de France».
« Islamic finance is a relatively unknown subject but this ignorance is due to a lack of communication and information, as well as misunderstandings that can even lead to confusion and misconceptions between Islamic finance and Islamism, between Islamic finance and secularism, between Islamic finance and republican values,” stated Mr. Assaad, who is also member of the “Club of Paris / Ile de France”, at the opening of the debate, entitled “Islamic Finance in France: what solutions for SMEs?”.
“In France, we are appearing as the most conservative, behind the Germans, the Swiss and the English,” added Mr. Assaad, before welcoming the signing of a Strategic Partnership - Memorandum of Understanding (MoU ) - on the 25th of March, between the Banque Populaire and the Caisse d’Epargne Group (BPCE) and Qatar Islamic Bank (QIB), one of the largest Islamic banks in the Gulf region.
Edith Cresson: “bypassing the system”
Believing that “the French administration is slow,” former Prime Minister and guest of honor, Ms. Edith Cresson, recommended that SMEs “deal directly with (foreign) investors” and that they “don’t wait” for the implementation of Islamic banking in Paris’ market.
“The clock is ticking. It is useless to go picket in front of factories when they are closing. One day, there will be nothing left. We have innovative SMEs, which have fabulous and technologically formidable projects but they lack funding. We must overcome the administration’s blockage and bypass the system. I see no alternative solution but to go ahead and collect funds,” suggested Ms. Cresson.
Samir Kouradine, Director-General of Global Secure Finance - the first consulting firm specialized in Islamic banking and business intermediation for the Maghreb and Middle East, had already asserted that “the heart of the problem, is establishing contact between SMEs and (foreign) investors.”
« For that, there exist several intermediaries who each have a network, a network that can come in contact with the families in the Middle East and another network that can get in touch with financial institutions. We also have a strong French Muslim community that comprises 5 to 6 million Muslims (compared to 2 million in the United Kingdom) and that constitutes an opportunity for potential investors who have a taste for development capital,” explained the founder of “Islangels Partners,” the first French, Sharia-compliant, Web-based venture capital platform.
“Evidently, now that Islamic finance is doing well, it is quite possible that a Saudi bank will soon open a subsidiary in France, a strategic and privileged partner of Saudi Arabia, on account of King Abdullah bin Abdul Aziz’s visit in Paris next July,” confides, to Saudiwave, a member of the Saudi delegation to the “Franco-Saudi Forum for Dialogue between Civilizations”.
source : saudiwave.com