Since the end of last year a number of Fortis branches are enabling Muslims to invest in made-to-order investment funds. These are shares that were carefully selected on the basis of Islamic sharia law. Companies that are linked to alcohol, tobacco, pork, financial services, weapons and entertainment are excluded.
"The Muslims are an important client segment," says Hilde Junius, spokesperson for Fortis. "We want to offer a proper answer to their wishes." The secure investment, linked to the halal stock market index 'Dow Jones Islamic market Titans 100' is a bull's eye.
Muslims can sign up to the Fortis B Fix 2008 Islamic Index 1 till the end of the month, an investment fund that respects sharia law. Hilde Junius says that they have of course created this fund on the basis of an existing demand, but that it is open for everybody. "Non-believers can also invest in it."
Fortis is following what's being done abroad. Western financial giants have been aiming at the Muslim clientele for much longer. Dutch bank Bilaa-Riba ('without interest') has offered halal investments from the beginning, and Dutch Rabobank and ABN Amro - that bought Pakistani Prime Bank last year - are also planning financial products. German Deutsche Bank, French BNP Paribas and Citigroup are not keeping quiet either.
Junius agrees that the idea is not new. "We have also already offered funds for specific groups. The Islamic fund is an investment with capital protection, coupled with a halal market index. At the least you get your investment back."
The index in question, the Dow Jones Islamic market Titans 100, is permanently supervised by the DJIM Sharia Supervisory Board and is composed of shares from a hundred multinationals that guaranteed that they don't deal with defense, financial services, alcoholic products, pork or cigarettes.
Hilde Junius says that you can sign up till January 31, 2008 and that the costs are the same as by the other funds they offer. The fund is offered mainly in Brussels, Ghent and Antwerp. Though Muslims can't pay interest or earn money in savings accounts, they can do so through investment funds. According to the Fortis spokesperson it's too early to evaluate the fund, but it's going well.
In the Netherlands they're already a step ahead, and banks are considering giving halal mortgages. Islam forbids to pay interest on loans. Rabobank wants to introduce halal (interest-free) residence credit, but that proposal has met with criticism. The city of Amsterdam thinks, though, that an Islamic mortgage would make it possible for Muslims to buy residences.
"According to a study by Rabobank 200,000 of the 1 million Muslims in the Netherlands are interested in Islamic banking. If this percentage is true for the capital, that's 2.4% of the Amsterdam population.
The city will press the point by minister of finance Wouter Bos so that Muslims in the Netherlands would soon be able to get Islamic mortgages. In Belgium the big banks are not yet considering interest-free mortgages.
Source: De Morgen (Dutch)
See also: Netherlands: Interest in Muslim loans unclear