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IFAAS study: 85% of Omani consumers ready to take-up Islamic finance products

Oman: Tuesday, December 27 - 2011 @ 15:22

The report was independently commissioned and published by IFAAS (Islamic Finance Advisory & Assurance Services), the international Islamic Finance consultancy.

‘Islamic Finance in Oman – Sizing the retail market’, analyses the retail market for Islamic Finance in Oman across all sectors of the financial market, including banking, finance and insurance.

The report examines the current behaviour of consumers and measures future market trends to gauge the real potential of Islamic Finance in Oman. The report fulfils the demand for empirical data that new and existing players need to develop their business plans using robust scientific information.

Key findings from the report reveal:

85% of consumers in Oman expressed an interest in Islamic Finance products, of which 59% were very interested and 26% quite interested
70% of consumers in Oman anticipate opening an Islamic savings account in the next 12 months with half (35%) expecting to do so within three months of one becoming available
77% of consumers in Oman expect to take out Islamic financing (loans) within the next 1-2 years.

‘Islamic Finance in Oman – Sizing the retail market’ also found that currently 86% of consumers in Oman have some kind of conventional banking products , of which 60% declared to be ‘bothered’ about using products that are based on Riba (interest). This further re-enforces the strong potential for retail Islamic Finance in Oman, inferring that a high proportion of consumers engaging in financial activities are likely to switch to Shariah compliant alternatives when they become available.

The report summarises its findings with several conclusions including:

The introduction of Islamic Finance in Oman is anticipated to change the country’s financial landscape over the next decade with far reaching positive effects for the overall economy
The retail market will see a shift from conventional banking and a change in the savings behaviour leading to sizeable ‘new’ money

Commenting on the findings, Farrukh Raza, managing director, IFAAS said, “The findings from ‘Islamic Finance in Oman – Sizing the retail market’ demonstrate that the growth from Islamic Finance has the potential to be bigger than currently expected. The challenge for decision makers is to ensure that their early critical decisions are based on accurate market information to ensure long term success. IFAAS’ report and findings have proved invaluable for many institutions considering their next move.”

Mr Raza also revealed, “Institutions are considering key questions such as whether to focus on customer retention or acquisition, which products to launch first, how to price their new products and how to distribute them. IFAAS’ report contains these and other findings and offer a wealth of information that will help shape critical business decisions. ‘Islamic Finance in Oman – Sizing the retail market’ is the first independent specialised report available on Islamic Finance in the Omani market. It is helping businesses to plan their resources, design their communications and understand what is required to retain or increase their market share in this dynamic market.”

To prepare the report IFAAS developed a quantitative survey which was conducted by independent researchers in form of random face-to-face street interviews across the Sultanate. The sample size of over 500 Muslim individuals filtered through qualifying questions and representing a weighted mix of demographics (age, gender, region, socio-economic background, status (national / expatriate) etc) reflects a true picture of the Omani consumer market.

IFAAS has been at the forefront of the development and growth of the Islamic Finance industry. Its founding members were instrumental in establishing a number of pioneering Shariah-compliant brands and launching innovative products across different sectors of the Islamic financial industry. Over the last few years IFAAS has developed into the first point of call for professional advisory on Islamic financial projects in Europe, Africa, the Americas, Middle East and beyond.

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Tuesday, December 27- 2011 @ 15:22 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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