Islamic Finance

Building capacity: Online distance learning courses for the Islamic economy

| 12 April, 2017 | General
 Paul Cochrane, DinarStandard
Building capacity: Online distance learning courses for the Islamic economy

Online distance learning courses have grown exponentially over the past few years and are estimated to be worth over $50 billion worldwide. While there are thousands of courses, only a handful cater to the Islamic economy and they are overwhelmingly focused on Islamic finance. Are there opportunities to broaden and strengthen Islamic economy courses in the sector?

YOUR PAIN POINTS ADDRESSEDASK YOURSELF

Scenario:

You are an academic institution planning to launch an online distance learning course focused on the Islamic economy

How attractive is an Islamic economy online distance learning proposition?

How robust is the global market demand for disseminating Islamic economy content through online distance learning?
What challenges are there to address the demand?
How can individual players position themselves for success?

Online learning, or e-learning, has risen in line with internet penetration and affordability of devices such as smartphones and tablets. 1,800 new courses were offered in 2015, and 2,600 were announced in 2016, bringing the total to nearly 7,000 online courses being taught by some 700 universities, according to online courses search engine and aggregator Class Central.

Institutions and companies are also offering online courses, often for free, known as Massive Open Online Courses, or MOOCs, with the number of students rising by two-thirds in 2016 to reach 58 million students, according to international education intelligence firm ICEF Monitor.

The number of students and revenues are on the rise, with the worldwide market for self-paced e-learning estimated at $35.6 billion in 2011, and forecast to have grown by 7.6 percent a year to $51.5 billion by 2016, according to a report by learning management system provider Decebo.

ISLAMIC FINANCE COURSES

In the Islamic economy, e-learning courses have largely focused on Islamic finance, with the core markets reflecting the global hubs of the industry: Malaysia and the United Arab Emirates (UAE), as well as Pakistan.

The International Centre for Education in Islamic Finance (INCEIF), a university set up by Bank Negara Malaysia (the central bank) to develop human capital for the sector, started Islamic finance e-learning in 2006. “We went online because we were only appealing to locals and wanted international students as well,” said Ezamshah Ismail, Dean of the School of Professional Studies at INCEIF, to Salaam Gateway.

Ernst & Young estimates the Islamic finance industry’s human capital sector between five and six percent of the global financial system. Addressing this niche, INCEIF’s Masters in Islamic Finance Practice (MIFP) is aimed at bolstering human capital in the Islamic finance sector. “We were not wanting to compete on asset size, but on intellectual capital development. The industry cannot grow otherwise, as the market needs more human capital,” said Ezamshah Ismail.

The Al Huda Center for Islamic Banking and Economics (CIBE), which has offices in Pakistan, Dubai and Uganda, started offering e-learning in 2007. Now with over 1,200 students in over 60 countries, Al Huda CIBE was also established to cater to a gap in the market.
“We were motivated to disseminate knowledge of Islamic finance, and also observed that banking and financial professionals did not have the time to properly enrol in campus-based programs,” said Muhammad Zubair Mughal, its Managing Director.

Its six distance learning programs range from four months in length, such as the Certified Islamic Fund Manager, to six months, the Certified Takaful Professional, and a year-long Post Graduate Diploma in Islamic Banking and Finance.

Entrants and the number of online courses have increased in recent years. The Saudi Arabia-based Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank Group, started offering free MOOCs on Islamic finance in 2015. Two courses were initially offered, while an additional two were added in late 2016, and a further two in February 2017. It is aiming for 18 MOOCs to be offered by 2020.

In 2016, the Islamic Relief Worldwide (IRW) and Germany’s Frankfurt School of Finance and Management teamed up to offer an online course, the Certified Expert in Islamic Microfinance (CEIM) via the Islamic Relief Academy.

The Emirates Institute for Banking and Financial Studies (EIBFS) also offers courses, with some 4,000 signed up as of 2016, according to its website.

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CHALLENGES

Online courses are able to appeal to students across the globe. Both INCIEF and Al Huda CIBE have an international appeal, and have managed to do so through word-of-mouth advertising.

The relatively small number of Islamic finance professionals as well as the limited number of online courses has played to their advantage. For example, some 1,300 students from 70 countries have graduated from the INCIEF program. Currently there are 1,800 students, with the majority in Asia, at 1,300 students, followed by Africa’s 300 students, and the Middle East and North Africa (MENA)’s 160. There are 50 students from Europe, 10 from Australasia, 27 from North America and one in South America. Only 7 percent of students are non-Muslim.

A challenge for online providers has been internet connectivity issues in certain countries, particularly in Africa and the MENA region, but as internet penetration has increased, there is growing appeal for online courses in countries that have upcoming Islamic finance sectors and where educational opportunities are often limited, such as in Sub-Saharan Africa. “In many Islamic countries, the internet is not well-developed. But with better internet and mobile devices, students can learn even under a tree by using a smartphone,” said INCEIF’s Ismail.

Adapting to technological change is key for the future success of e-learning, such as offering courses on smartphones, which are rising in usage while purchases of laptops and desktop computers is on the decline. “In the future, online courses will be transformed from distance learning management systems to dedicated paid-for applications (Apps),” said Al Huda CIBE’s Mughal.

OPPORTUNITIES

All online courses in Islamic finance are taught in English, despite most of the sector’s terminology being Arabic. But according to an assessment carried out by Al Huda CIBE, there is less demand for e-learning in Arabic. “The new market is West Africa, where Islamic finance is booming, and the second emerging market is Central Asia, so we are transforming our programs into French, and we are trying to launch one program in Russian as well,” said Mughal.

Both INCEIF and Al Huda CIBE are planning to offer more courses in line with the expansion of the Islamic finance sector, which was forecast to have reached $2.2 trillion at the end of last year, according to the ICD–Thomson Reuters Islamic Finance Development Report (IFDR) 2016.

“Islamic finance is a big area, so we have to expand into having specialties and going more in-depth,” said Ismail.

More courses could be offered in different segments of the Islamic economy. Only the Halal Research Council, through a partnership with different universities, including the Agricultural University of Pakistan, offers a certification program on the halal industry itself, launched in 2012. “It is a unique program on the halal food industry, also covering halal tourism, logistics, cosmetics, and non-food items. That course, to be frank, has not had as much response as Islamic banking and finance but I am optimistic demand will rise,” said Al Huda CIBE’s Mughal, who is also the CEO of Halal Research Council in Pakistan.

Thinking of launching an online learning course? Suggested roadmap:
Content is king: Spend time on content development; identify the gaps in the market and go beyond pure Islamic finance to touch on other sectors, including the halal industry 
Provide a robust, high-impact experience: Focus on quality delivery of the training, bring in high-powered advisors and instructors and have students provide feedback and word-of-mouth marketing

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