The Islamic Bank of Britain (IBB) has been riding the wave of Islamic Finance in this country. Now it’s turning its attention to supporting ethical enterprise in Birmingham.
Having already opened a branch in Birmingham as well as a Commercial Centre for Islamic finance (to cater to its high net-worth customers), IBB has now pledged to work with Birmingham City Council in order to help budding entrepreneurs in the city. Given that Muslims comprise 14.3 per cent of Birmingham’s population, it’s no surprise that IBB believes the city is a honey pot for individuals and businesses looking for Sharia’a-compliant (Islamic) banking.
“We are committed to providing these entrepreneurs with the opportunity to grow their business without compromising their ethical principles,” explains IBB Chairman Mohsen Moustafa, “Our business banking proposition and Commercial Property Finance product can help them achieve their aims in harmony with Sharia’a law.”
Most notably, Sharia’a law prohibits interest payments and certain types of investment, such as those concerning alcohol, pornography and gambling.
Many of IBB’s products remain unique in the UK retail market, such as its Commercial Property Finance product. It is the only Sharia’a compliant Business Mortgage product that works using Islamic principles of shared ownership.
Instead of giving the customer a loan to go and buy a property, the bank and the customer buy the property together as partners, and over time the bank transfers it’s share of the property to the customer in return for set monthly payments.
In addition to the Commercial Property Finance Product, IBB offers several other banking products that can be of use to “ethical entrepreneurs” such as Savings accounts and Term Deposits, Business Finance and Investment accounts.
“The real strength and opportunity for Birmingham lies in its diversity and the scope for energy and enterprise that this creates for us,” explains Moustafa, who says he wants to ensure that the bank’s presence in the city translates into business growth among communities that may feel excluded from other financial avenues.
Since becoming the first high street bank in the western world to offer Islamic banking when it opened in August 2004, IBB has gone on to open five new branches and two Commercial Centres in the UK. With over 40,000 customers today, it now handles more than £125m of customer deposits.
By Melissa Hancock, Real Business 27th March 2008