In the UAE, almost 60% of the population holds at least one Islamic Banking product, according to a recent survey of 5,300 UAE residents by Souqalmal.com, a local finance and banking products comparison and shopping portal. These products are by definition Shari’a-compliant and come with standard requirements including the prohibition of interest and the sharing of risk between the customer and bank.
When choosing which banking products to use, such as home and auto finance, personal bank accounts and credit cards, 60% of UAE nationals and Arab expats hold compliance as a deciding factor. In contrast, Western expats in the UAE generally don’t choose their banking products based on compliance, instead preferring quality service and online banking options.
Islamic banking still has plenty of room for growth, but there is still work to be done when it comes to educating consumers; 43% of those who don’t have a Shari’a-compliant banking product note that they simply don’t understand how it works or how it’s different from conventional products. Of those who do use Islamic banking, 50% say that they chose it over conventional banking due to the availability of more favorable rates and fees.
To help in the effort to make Islamic banking products more accessible and easily understandable, Souqalmal.com just launched a new section on their site dedicated to Islamic products and content related to Islamic banking, with over 250 individual listings including credit cards, personal finance, home finance and vehicle finance. The portal allows consumers to compare products side by side to hopefully make a more informed decision, between products and between conventional and Islamic banking options.
With the most enthusiasm for Islamic banking coming from consumers below 25 years old, this sector is certainly set to expand. In fact, only a few percentage points differentiate age groups when it comes to a preference for Islamic banking.
Check out the full report and survey results in the grey box to the right to learn more about who uses Islamic banking products, what their reasons are for using it, and how different income levels and ages consume these products.