Donna has been in the Islamic banking industry for only four months, but the thought of going back to work for a conventional bank has already crossed his mind. “It is supposed to be easy because the people are mostly Muslims, but Islamic banks don’t have the loan schemes that conventional banks have, which are more convenient for customers’ businesses,” he said.
As a credit marketing staff member, Donna had already been warned by former colleagues that jumping ship to an Islamic bank would not be easy. He had prepared himself for some hard work, but did not anticipate just how hard it would be. “At the conventional bank, I used to be able to book around 3 billion rupiah ($222,000) of credit a month. At the Islamic bank, the most I can get is 1 billion rupiah,” he said.
Since the establishment of the first Islamic bank in Indonesia in 1991, the Sharia (Islamic law) banking industry has seen fairly steady growth, but has been unable to capitalize fully on the potential of a market of more than 200 million Muslims. In 2015 the industry recorded its lowest ever asset growth, of 8.8%, due to a national economic slowdown. The industry has picked up pace since July, but is still lagging well behind its conventional counterpart.
Islam prohibits usury and Islamic banks therefore operate on the basis of profit and loss sharing, instead of conventional banking’s interest-charging model, which many customers tend to prefer for its element of certainty..—Agencies