A STUDY ON ISLAMIC BANKING EDUCATION AND STRATEGY FOR THE NEW MILLENIUM- MALAYSIAN EXPERIENCE

It is estimated that one billion people in the world adhere to the Islamic faith and becoming more devout by the day (Barakat and Sarver, 1997). At a growth rate of 15 percent a year, Islamic banking has $65 billion in assets. However, this is less than 1 percent of bank assets worldwide ( Wilson, 1995). The next millenium could witness a tremendous growth in Islamic banking. For example, in the United States, the financial needs of the country’s Muslim community are estimated at about $80 billion, as a result of demand by Muslim immigrants to that country (Ahmad, 1998). Despite 15 percent growth of Islamic banking elsewhere in the world, Islamic bank in Malaysia is still groping to achieve a market share of 5 percent by the year 2000. As at June 1998, Islamic bank total deposits are only RM10.04 billion as compared with RM420.8 billion deposits in the whole banking system. This means that Islamic banking’s share in terms of deposits in the Malaysian banking system, comprises only 1.06 percent. Economic downturn in the Asian region is part of the reason, apart from the weak marketing strategy (Haron, Ahmad and Planisek, 1994). However, the Islamic bank’s education strategy are is equally important. Education in Islamic banking and finance has been neglected as far as Islamic banks are concerned. Therefore, the purpose of this research is to examine Islamic banks ’ strategy in educating the public about their existence and products. With 53 percent of Malaysian population being Muslims, it is appropriate to ask why Islamic banks can capture only a 1.5 percent share in terms of deposits. A study conducted in Malaysia in 1994