Muslim investors profit by adhering to faith: San Francisco Chronicle

Matthai Kuruvila

As credit markets have imploded, triggering a global economic crisis, Islamically correct investors have seen a change of fortune: The conservative principles this small group of devout Muslims clung to during the economic heyday has insulated them from the worst of the past year's suffering.

Their renunciation of the interest-based economy kept them away from investments in financial services companies, whose stocks have collapsed, and out of traditional mortgages.

"There was a time two or three years ago that Islamic finance was considered simply too conservative," said Professor Ibrahim Warde, author of "Islamic Finance in the Global Economy" and an adjunct professor at the Fletcher School of Law and Diplomacy at Tufts University. "Right now, many people are recognizing that maybe it wasn't such a bad thing."

Dow Jones Islamic Market Indexes, which represent benchmarks for Islamically correct investment categories, have been outperforming their non-Islamically compliant counterparts by 3 to 4 percent in key indexes. The two Amana Income and Growth funds, the largest Islamic mutual funds in the country with $1.2 billion in combined assets, have been outperforming the S&P 500 in the past year by 13 and 7 percent, respectively. (Both Amana funds also outperform the S&P index on 5- and 10-year comparisons.)

Bay Area residents who bought homes through an Islamically compliant lender in San Jose, the Ameen Housing Cooperative, don't have to worry whether their lender will work with them if they lose their jobs. Islamic lenders are required to work in good faith with distressed borrowers to figure out ways to make payments manageable - and co-op leaders say they will.

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Can Muslims provide solutions to the Current Economic Crisis?: Islamicity

By: Dr. Aslam Abdullah
IslamiCity* -

America Muslims cannot sit on sidelines talking only about foreign policy related issues. We must play a role in coming up with ideas to help the economy.

The Quran requires Muslims to be part of any change that promotes justice, equality, liberty and rule of law for every creation of God anywhere in the world.

The Quran instructs the believers to cooperate in things that are virtuous and lead to the fulfillment of the covenant with God and to avoid things that promote repression, aggression and things that result in undesirable consequences (Quran 5:2).

Can Muslim Americans offer something new to the nation that will help it overcome its worsening economic crisis and reassure the world that America is a nation that caters to justice and equality of all?

Muslim Americans have ample intellectual resources to make an attempt in this direction if they assume the much needed responsibility of the hour. With many intellectuals, educationists, economists, religious scholars and social activists, a debate within the Muslim community can be initiated to welcome and promote ideas that would result in concrete proposals for the betterment of the nation as a whole.

Muslims claim that the Quran offers guidelines to use human and material resources for the betterment of all. What are those guidelines and how can those guidelines can be given a concrete form and shape?

Muslim American organizations and Muslim intellectuals ought to offer relevant ideas to ensure that they play an active part in the economic recovery process.

Economists alone cannot find an answer to all the fiscal woes that the nation has at present. Economists can help to manage and utilize resources in an efficient and professional manner, yet the economists also need directions to move forward avoiding stagnation in their own ideas.

Can Muslim intellectuals offer some alternative ideas to utilize the natural resources in an affective manner and suggest ways and means to increase the circulation of money in such a way that it is distributed justly among people rather than being controlled and monopolized by a few?

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