Muslim Community Cooperative of Australia as an Islamic Financial Service Provider
Since the 1970s, interest in Islamic banking and finance has grown in both the Muslim and non-Muslim world. The underlying principle of this development has been the desire of Muslims to comply with the Qur’anic prohibition of riba (interest) by engaging in interest-free banking and finance. The Muslim Community Cooperative of Australia (MCCA) was the first Australian Islamic financial service provider. This chapter of the book Muslim Communities in Australia describes the history of the MCCA’s development over the past ten years, from its beginnings in 1989 as a community-based project to the present day. The chapter outlines key principles of Islamic finance: the Qur’anic prohibition on riba (interest), avoidance of excessive speculative risk, profit and loss sharing (PLS), and the idea that wealth creation must contribute to ‘socially beneficial effort’. The main types of contracts that the MCCA uses in its operations are described, as well as how deposits are treated. Saeed describes the growth of the MCCA’s membership and its deposits and assets, and explores some of its strengths: deposits never equating to liabilities, professional Islamic financial advisers, and a focus on social responsibility and fairness. There are also challenges, such as: increasing resources, effective marketing, staff training and maintaining competitiveness. Many of the MCCA’s clients feel a religious obligation to support it; combined with an increase in services and accessibility with the launch of a credit union, the MCCA’s growth is likely to continue.