Almost half of Muslim consumers have never used Shariah-compliant products, research from shariah-compliant bank Gatehouse has revealed.
In what should be a wake-up call to the UK Islamic banking industry the Home Purchase Plan provider found that 46% of Muslim consumers said they have never used Shariah-compliant products.
The figure, which rises to 53% among Muslim women, underlines the challenge faced by Shariah-compliant finance providers.
Charles Haresnape, CEO of Gatehouse Bank, said: “Our report highlights that providers of Shariah-compliant finance are missing out because of a largely untapped market for their products.
“If nearly half of all Muslim consumers have never used Islamic finance that means hundreds of thousands of potential customers are waiting to be reached. A key lesson is that we and the whole industry need to do a better job of reaching out to the Muslim community and explaining the benefits of Shariah-compliant products.
“Most importantly, the research shows we need happy customers and faith leaders to become community advocates for Islamic finance because word-of-mouth is highly valued among Muslim consumers.”
However, a number of positive findings highlight the huge opportunity available to the sector if it invests in the right areas. Seven in ten (71%) Muslim consumers questioned believe that Islamic finance is dedicated to the interests of the community, while 61% believe it works hard to better serve its customers.
Some 85% of existing Islamic finance consumers said that their experience exceeded their expectations, suggesting that using this rich seam of positive experiences and building on a sense of community could be key to increasing popularity.
Awareness and perception of Islamic finance among non-users of Islamic products is one of the industry’s biggest obstacles to overcome, with only 53% of non-users knowing anything about it, and only 35% of non-users viewing it favourably, the research found.
Among consumers who said they were not interested in Islamic finance, awareness fell to just over a third (36%) and positive perception to a disappointing 3%.
The study also found that, while 71% of people surveyed thought that Islamic finance was trustworthy and ethical, some 60% found it difficult to purchase, and 62% thought it was hard to compare options.
Muslim consumers contribute £31bn to the UK economy, boasting a spending power of £20.5bn.