(ABC.NET) Australia’s finance sector is tapping into the Islamic market, with one of the country’s biggest lenders launching a Sharia-compliant loan and smaller institutions vying to become the first bank for the nation’s Muslim population.
With roughly 600,000 people identifying as Muslim in Australia, industry reports place the potential size of this market in Australia at $250 billion.
NAB believes it’s been growing at a rate of about 15 per cent since the 1990s.
Melbourne couple Melike Yildirim and Ibrahim Atik are some of the Australian consumers who have been swapping over to the Islamic finance sector in recent years.
The couple’s interpretation of their Islamic faith means they want to try to avoid paying or receiving interest.
“It’s not just you can’t eat the bacon, you can’t drink the alcohol,” Ibrahim says.
“We also want to avoid the interest. If you can avoid it, it makes life less stressful.”
But that’s been hard to achieve in Australia’s mainstream banking system.
Interest is everywhere – it’s tied to home loans, deposit accounts, credit cards, and is meticulously manipulated by our own central bank.
Like many Australians, Melike got her first bank account through Commonwealth Bank’s Dollarmites program as a child and she still banks with the institution.
She deals with the interest dilemma by donating all of what she accrues to charity.
Her husband, meanwhile, simply withdraws his pay from his bank account as soon as he receives it.
Before the couple met, Melike had also previously taken out a traditional home loan with Commonwealth Bank.
“I’ve always wanted to go down the path of not using interest but I couldn’t find a bank I was happy with,” Melike says.
But after the couple married in 2018, they started using an Islamic financing company to buy property. They’ve now flipped three houses, all using the same financier.
“It suits our religion better,” Melike says.
