Sweden: No interest in Islamic banking

Foreign Islamic banks are trying to entice Swedish Muslims as customers, but Swedish banks are not interested in developing Islamic-acceptable bank services.

Mahmoud Aldebe, spokesperson for the Muslim Association of Sweden, representing 70,000 members, has difficult understanding why. "We have had contacts with Ikano, Norda and Swedbank to discuss possible solutions, but there wasn't any great interest"

He goes on to say how foreign banks have their eye on the Swedish market. The Muslim Association of Sweden has received visits from delegations from the Islamic Bank of Britain, but also from Norwegian banks who are considering offiering interest free alternatives.

"They see what potential they find here." he says.

Some Muslims have gone with the interest-free cooperative-bank JAK, but Mahmoud Aldeber thinks it can't wholly supersede sharia-type services in a regular bank. He says that the bank demands make it only possible to take out small loans. (see here for more on JAK).

Mahmoud Aldebe is convinced that big banks should have great commercial interest to turn to Swedish Muslims. About 400,000 Swedes are estimated to have Muslim background of some form, but is unclear how many would want bank services according to Islamic law.

Some Swedish banks and loan institutions have made their own calculations, but have come to the conclusion that it isn't profitable enough. Lena Hedlund, communications head for SBAB, says that they had considered it about a year ago, but had decided to give priority to new saving products aimed at everybody. Swedbank press secretary Anna Hammarskiöld says that it has been discussed but that only branch in Rosengård in Malmö offers no-intersest saving accounts.

In the insurance field there's great interest in the Muslim consumer. Folksam has worked with the Muslim Association of Sweden for the last five years. The company's business insurance and funeral insurance has been approved by the European Council for Fatwa and Research.

Stig Karels of Folksam says that Muslim in Europe find they need insurance they know they can sign. However the company had not only got assurances but also marketed itself towards those groups. Folksam had sent information to imams and saw to it that they would be mentioned during Friday prayers in the mosque. One especially important marketing argument is that Folksam is a cooperative and the profit goes back to the members. This was important so that the insurance compny won't be seen as going against Islam.

Not all insurance companies can compete on the same terms for religious Muslims consumers. But Stig Karels is amazed that companies show so little interest for this consumer group, saying that he was surprised that they haven't encountered any competition.

Source: Ekonomi & Politi (Swedish), h/t FOMI (Swedish)

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