Hungary hungry for IF

Hungary's first Islamic bank is on its way, says Istvan Kaknics-Ujhelyi, director of Hungary's Al-Gharnati Foundation and advisor to the mayor of the northern city of Eger. Hosszu Ferenc Ali Hasszan, a Hungarian currently undergoing Islamic banking training in Malaysia, told The Islamic Globe that Hungary is working towards opening its first fully functional Shari'ah compliant bank, called Magyar Iszlam Bank in the coming years.

"But we cannot do it alone," said Hasszan and called for assistance from transnational bodies, such as the Islamic Development Bank as well as established commercial Islamic banks.

Islamic finance is becoming a hot topic in Hungary and last month the country's Foreign Ministry along with government agencies and the Al-Gharnati Foundation organized a conference in Eger. Representatives from the IDB and from Egypt's Faisal Islamic Bank were in attendance.

Hungary has not always had a close or warm relationship with Islam and although the country has long had a Muslim influence - since the sixteenth century when it was partially occupied by the Ottoman Turkish Empire - Islam came to Hungary at the point of a sword. Less than 1% of Hungarians identify themselves as Muslims in the latest census in 2001. Eger sat on the front line between Christian Europe and the Muslim Ottoman Empire and was as far as the Turkish invasion of Central Europe reached. However, in the 21 century, Eger is acting as another frontline between Islam and Christian Europe, and inviting the Turks back - but asking them to bring their checkbooks with them. In attendance at the conference was Ufuk Uyan, general manager of Turkey's Kuveyt Turk, who took the opportunity to remind attendees of the resilience of Islamic banking to withstand recent economic crises.

Kaknics-Ujhelyi explained to The Islamic Globe that Hungary was keen to open up to Islamic finance because of  the debt crisis that engulfed the country in the global economic slowdown. As a result Hungary accepted a $25bn rescue package from the IMF, World Bank and the EU in 2008. The country hopes that by inviting new investors from the Gulf (notably Kuveyt Turk is 62% owned by Kuwait Finance House) and Malaysia to Hungary new capital will be injected into the economy.

Kaknics-Ujhelyi also stated that he hopes that Hungary can position itself as the Islamic banking center of Central and Eastern Europe and he will be setting up the Middle East and Asian Research Studies Institute as well as the Ethical Economic and Financial Studies Centre. The latter will focus on the implementation of Islamic economics and Islamic finance in Hungary.

© The Islamic Globe 2011