Correspondence: Hussain Gulzar Rammal, School of Commerce, The University of Adelaide, 233 North Terrace, Adelaide, South Australia 5005, Australia. Tel: +618 83034513; Fax: +618 83037243; e-mail: hussain.rammal@adelaide.edu.au

¹is a lecturer in International Business at the University of Adelaide. He holds a bachelors degree from the University of Melbourne and a Master's degree from Flinders University. He has published in numerous international business journals in the areas of Islamic financing, international trade and international business negotiations.

²is a professor of Finance at the University of Adelaide. He holds an undergraduate degree from the London School of Economics and a Masters degree and PhD from the University of Manchester. He has published over 70 articles, with the majority appearing in leading finance journals. His primary research interests lie in risk management issues, particularly as they relate to insurance, derivatives pricing and securitised real estate assets. He has consulted for numerous financial institutions over the years on risk management topics and is also the co-editor of the International Journal of Managerial Finance.

Received 20 October 2006; Revised 20 October 2006.

Abstract

The purpose of this study is to examine the awareness of Muslim Australians of Islamic banking, particularly profit-and-loss sharing agreements. A sample of 300 Australian Muslims were surveyed utilising a short questionnaire containing specific questions relating to the willingness of respondents to purchase profit-and-loss sharing Islamic banking products. The results indicate that the majority of the respondents are interested in purchasing these products, but are not properly informed about how they function. It was common to find respondents who were keen to purchase Islamic banking products, but only if credit facilities were available. This is contrary to Islamic Shari'ah law, and suggests a lack of understanding of the principles of Islamic finance.