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Status of Islamic Finance in Germany in 2019

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Islamic Finance in Europe

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Abstract

Germany is a crucial market for Islamic finance in continental Europe. A lot of attempts and pioneering work were made to establish Islamic compliant products in this market, most of them with hardly any success. In my chapter, I want to shed light on both negative and positive experiences and cases within the Islamic finance sector in Germany with a description of the current market situation. My chapter closes with sections on the remaining challenges and an outlook to the future.

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Notes

  1. 1.

    http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/g20-treffen-in-ankara-schaeuble-islamische-finanzierungsmodelle-wichtiger-13787046.html (23.05.2018).

  2. 2.

    There were about 2000 articles on granting the first fully fledge banking license to an Islamic bank and nearly all were with a positive echo.

  3. 3.

    Umar Oseni and M. Kabir Hassan (2010), “The Emergence and Development of Islamic Banking” in: Islamic Finance – Instruments and Markets, p. 113.

    Ahmad el-Naggar, Zinslose Sparkassen im Nildelta, Al-Kitab-Verlag.

  4. 4.

    European Central Bank – Eurosystem, Occasional Paper Series, Islamic Finance in Europe, No. 146, June 2013, p. 26.

  5. 5.

    A. Farhoush, M. Mahlknecht (2010), A critical view on Islamic Finance in Germany, p. 204 in: pp. 203–212.

  6. 6.

    Chahboune, Jallale/El-Mogaddedi, Zaid (2008), Islamic Banking – das Marktpotenzial in Deutschland, in: Zeitschrift für das gesamte Kreditwesen, 15, 01.08.2008, p. 34.

  7. 7.

    Commerzbank, Geschäftsbericht 2000, p. 19.

  8. 8.

    Alharbi, Ahmad (2016), “Development of Islamic Finance in Europe and North America: Opportunities and Challenges”, p. 116 in: International Journal of Islamic Economics and Finance Studies, Nov 2016, Vol. 2, Issue 3, p. 109–136.

  9. 9.

    A. Farhoush, M. Mahlknecht (2010), p. 206.

  10. 10.

    Presently (2018), there are the following companies: inaia GmbH (formerly ifis Capital Gmbh), My Islamic Finance and ZinsFrei (formerly fmf).

  11. 11.

    For more information, see: https://arabesque.com/

  12. 12.

    According to public statements of M. Dirrheimer, owner and CEO of FWU.

  13. 13.

    Due to a call with Mr. Ansari from FWU on 17.7.2018.

  14. 14.

    For more information, see: https://www.solarisbank.com/en/

  15. 15.

    For more information, see: https://www.getinsha.com/en

  16. 16.

    The absence of a stable, sustainable business model is reason to refuse the license.

  17. 17.

    Even though there were explicit written rules of order of the bank, declaring the independence of the management, the banking supervisory authority Bafin doubted that fact as in their view the factual influence due to the knowledge of the scholars would be harmful.

  18. 18.

    According to §1 (1) of German banking law (Kreditwesengesetz, KWG).

  19. 19.

    For more information, see https://www.kt-bank.de/

  20. 20.

    The real estate transfer tax (Grunderwerbsteuer) is a state-based tax and differs accordingly. It ranges between 3.5 and 6.5 percent of the purchasing price.

  21. 21.

    As there is no information in the home page of KT Bank, the annual financial statements are publicly available in (after filling in “KT Bank” in the search field): https://www.bundesanzeiger.de/ebanzwww/wexsservlet?global_data.language=en&session.sessionid=094082d1418518649a46fcd70e3e9215&page.navid=gotolastpage

  22. 22.

    See annual financial statements of KT Bank, 2016.

  23. 23.

    Besides this 1.6 mio is held in cash.

Bibliography

  • Azadeh Farhoush, Michael Mahlknecht (2010), A critical view on Islamic Finance in Germany, p. 204 in: V. Cattelan (ed.), Islamic Finance in Europe, pp. 203–212, Edward Elgar Publishing.

    Google Scholar 

  • Ahmad el-Naggar (1982), Zinslose Sparkassen im Nildelta, 2. Edition, Köln: Al-Kitab-Verlag.

    Google Scholar 

  • Alharbi, Ahmad (2016), “Development of Islamic Finance in Europe and North America: Opportunities and Challenges”, p. 116 in: International Journal of Islamic Economics and Finance Studies, Nov 2016, Vol. 2, Issue 3, p. 109–136.

    Google Scholar 

  • Chahboune, Jallale/El-Mogaddedi, Zaid (2008), Islamic Banking – das Marktpotenzial in Deutschland, in: Zeitschrift für das gesamte Kreditwesen, 15, 01.08.2008, p. 34.

    Google Scholar 

  • Commerzbank, Geschäftsbericht 2000, p. 19.

    Google Scholar 

  • European Central Bank – Eurosystem, Occasional Paper Series, Islamic Finance in Europe, No. 146, June 2013, p. 26.

    Google Scholar 

  • Umar Oseni and M. Kabir Hassan (2010), “The Emergence and Development of Islamic Banking” in: Islamic Finance – Instruments and Markets, pp. 113–117, London: Bloomsbury.

    Google Scholar 

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Authors and Affiliations

  1. Independent Consultant, Mannheim, Germany

    Uğurlu Soylu

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  1. Uğurlu Soylu
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Correspondence to Uğurlu Soylu .

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  1. Pantheon-Sorbonne University, Paris, France

    Mohyedine Hajjar

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Soylu, U. (2019). Status of Islamic Finance in Germany in 2019. In: Hajjar, M. (eds) Islamic Finance in Europe. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-04094-9_6

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  • DOI: https://doi.org/10.1007/978-3-030-04094-9_6

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  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-04093-2

  • Online ISBN: 978-3-030-04094-9

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