Cordoba, Spain, March 27th 2015. The I International Congress Halal in Spain held these days in Cordoba.ended asserting the importance of knowing their customers financial models and Islamic finances as an alternative to the traditional banking for the Spanish SMEs.

"I, and Spanish SME, can't afford an outstanding payment".  With this sweeping statement the moderator of the panel on Islamic finance Angel José Del Río, Commercial Division of Aresbank, expressed one of the main concerns of small and medium-sized businesses in Spain which, although familiar with export business, often are unfamiliar with the financial system of Islamic countries. "You have to know your customer, their location and ways, and that means knowing how they finance their company, their methods of payment, and of course how can you receive that payment", points out Del Rio, whose bank does not offer Islamic banking products, nor operates under the model of Islamic finance due to the actual regulation in Spain, which does not allow it. Nevertheless is counts with sister banks in many Muslim countries. 


Nestor Montoya agrees that one needs to know his customers methods of payment, responsible for Corporate Banking of Attijariwafa Bank of Morocco, who explains that in commercial transactions with African and Middle Eastern countries is still very common to use of the letter of credit as a means of payment, which is unusual when exporting to European markets. “The letter of credit is useful for the applicant and assures the payment: the client knows that it is going to deliver the goods on time, quality and deadlines is assured", he added. 

One of the characteristics of Islamic finance is that they are based on trust and respect. When a contract is signed both parties must be in equal conditions and share the same risks, though perhaps the best known feature of Islamic banking is that they do not apply interests, which are not allowed by Islam. Nor can we invest in anything related to gambling or alcoholic beverages. 

Zayd Farook, responsible for Islamic Capital Markets for Thomson Reuters in the United Arab Emirates, believes Islamic finances are the market of the future. "The prospect of economic growth of Islamic countries populations is comparable to India or China. The birth rate is higher (tan ours) and we are talking about a very young population who becomes a part of the working population", while European population is aging, which creates a drag on the economy, indicates Farook.

"The 85% of Muslims believes that their religion is very important in order to take a decision as opposed to 30% of European and 49% of North Americans" he adds, stressing that religion influences in their transactions and types of consumption or production.

 United Kingdom is the leader of banking and Islamic finance in the Eurozone, in order to achieve this position the UK has changed its regulations, while countries such as France and Germany are currently exploring the possibilities. 

"I always look to the United Kingdom, their view “no obstacles, but no special favours”. Their ability to attract and implement alternatives to the traditional market. And if the United Kingdom does so with success and Germany and France are looking into it, it is a matter of time for Spain", explains Del Rio. 

Jose Maria Fuentes, director of Investments of Kernel Investment Group in the United States, stresses that there are already initiatives to change this regulation. Fuentes says that Spain is falling behind in this issue, that there are differences within the legal framework and a lot more bureaucracy than in other countries, but that have already been initiated conversations with the Government, the Central Bank of Spain, the ICEX or multilateral institutions, among others. 

When we talk about Spain, we are not just talking about financial services for the Muslim populations in our country, but also about Spain becoming the centre of Islamic finance in the Mediterranean.

"Due our strategic position, good relations with the Arab countries and our tradition, Spain has to become a hub for Islamic finance in Latin America. It is the only thing that we can take from the British. No one can take from us our relationship with Latin America and the Mediterranean countries". 

How to connect the dots between the Islamic finance industry, and the Halal industry, was the idea raised by Vicary Daud Abdullah, president and CEO of INCEIF, University Malaysia who specializes in Islamic finance. "It is very important that Islamic finance are connected with the Halal objectives (…) and that we change the way they are perceived", explained in reference to the negative connotations that have for a certain audience such terms as Sharia or Islam.

"During the last year, the Halal concept is being treated by the media with greater rigour, being more consistent with its real meaning. Has gone from being within news on terrorism or violence to make headlines in the economic section of the main media and in media specialised in tourism, ecology or gastronomy", explains Laure Rodríguez, director of communication of the Halal Institute.