Interview with Musa Shihadeh, General Manager of Jordan Islamic Bank 

Many people are interested in knowing why you weren’t affected by the financial crisis? 

Jordan Islamic Bank (JIB) is offering banking services and products according to the principles of the glorious Sharia which allow trading while the interest dealings are forbidden.

-the trust of our customers
-our stakeholders are convinced from our services which are according to the Islamic Sharia.

JIB is maintaining adequate liquidity always because the priority for the liquidity. JIB is financing the customers by buying the commodities and never finance the customers by cash. This system support the national economy. JIB never dealt with the derivatives or any bonds or financial papers based on interest. Since establishment, we have been conservative. People open accounts with us based on trust. We operate according to Islamic Law, and invest the customers’ deposits over the course of one year. At the end of the year, we credit their accounts with their share from the profits earned this year, according to the law and the decisions of the board of directors.

We do not have a fixed rate, and we pay back to the customer, depending on the success of the business. People like our system because we do not pay or charge interest. We are proud of the trust that customers gives us. We have accounts all over the world with other banks in various currencies that accept our terms.

How different are you from other Islamic banks?

All Islamic banks are offering banking services according to the Islamic Sharia. We operate by financing the commodity. Other Islamic banks operate this way too. As, the principle is the same: no interest. in all banking dealings. Generally, we pool profits annually and semi annually in portfolios. We concentrate on retail and small business and small depositors.

Are people still investing and making profits during these turbulent times?

Yes, and our financings are growing. Last year JIB achieved 13% growth in financing. JIB is financing the commodities and never finance by direct cash. Also, our customers accept this system and very happy because this system is according to the Islamic Sharia and very safe. They achieve success and profit.

JIB is growing together with the growth of our customers.
JIB never change the profit rate after completing the ''murabaha' deal which is very convenient to the customers.

As someone convinced with this system, how much convincing needs to be done in Jordan?

A lot of people are already convinced. We have about 3,000  new accounts monthly, and our customers are staying with us. We are one of the fastest growing bank in Jordan. However, a lot of work still needs to be done because conventional banks were established here in Jordan before us. The culture of interest here is deeply rooted. JIB is very successful because we offer the banking services according to the Islamic Sharia, and the people are demanding our services and satisfied.

Are your customers only based in Jordan?

The majority are in Jordan, yes. We do not grant facilities outside of Jordan unless through banks abroad. We are a local bank with no branches outside, we have 60 branches and 12 offices in Jordan, also we are a member of Albaraka banking group. We are  dealing with foreign banks, who accept our terms i.e. no interest involved in any dealings, and we have a Banking Relations department for this purpose.

When are you going to be launching your new internet banking system?

We have already launched our internet banking services in 2004. we started this year our  i-banking, hoping that this system will improve our services to the customers, because we are committed to apply the latest  innovative products in banking industry. We have therefore started I-Banking services through the internet as shown on our website.

What are you strategic objectives for next year?

As for our objectives, we have to offer new services to customers, and grow with them. We attract new customers from the new generation. We have a new project to attract public sector staff, from the ministries. We are succeeding with this project, offering present services but on flexible terms. We offer flexibility without compromising our main principle.

- continue to diversify and develop banking services.
- expand financing by means of Ijara Munthahia Bittamleek.
- seek to issue tradable Islamic bonds.
- expand financing program for professionals, craftsmen and women and small industries to help
- creating new jobs and to help in reducing the poverty.
- opening new branches in Jordan in order to offer our services near the customers.
- install and operate new ATMs ,and replace the old ones.
- strengthen and develop the principles of corporate governance at the bank.
- continue the application of Basel II requirements.
- introducing new techniques to the banking system.

Where do you draw the line between staying true to your conservatism and offering new and flexible services?

We have a main principle of no interest that cannot be compromised whatsoever. We do not give cash, we buy commodities. Other than that, we can really offer a lot of flexible options to customers, judging on a case-by-case basis to attract them and work with them according to their individual situations. We really are growing. We find solutions for the customers’ needs. There are many ways to finance under the Islamic system while remaining true to our main principles.

What about social responsibility?

According to the article of the association of the bank. JIB is offering the banking services and the social services to the people, we quote below some of examples of the bank social role;

- JIB continue to participate in conferences and seminars which aim to develop the business of Islamic banks.
- JIB continued to support the scientific research and training. We have a special social service where we offer an interest free cash loan, for social purposes such as medical treatment, marriage or education.

The average of it is JD 500, and we recover the same amount only within a year.. We finance professionals and craftsmen, from people like doctors to electricians. We give them capital and remain with them until they succeed and start earning returns on their projects. We do not force them to repay us the very next month. This service really helps in reducing unemployment and poverty. Also, JIB continued to sponsor the mutual insurance fund for the bank debtors which was established in 1994. For this, we received international rewards for achievements in social services and for the environment. We do not finance smoking, and other things regarding preserving the environment. We are truly committed to social responsibility.  

What are your future plans?

Mainly, we want to attract new customers, increase our business, and increase our share in the market. We want to introduce new services and open new branches to achieve high return on deposits and shareholders' equity.

And as I mentioned before:

- continue to diversify and develop banking services.
- expand financing by means of Ijara Munthahia Bittamleek.
- seek to issue tradable Islamic bonds.
- expand financing program for professionals, craftsmen and women and small industries to help
- creating new jobs and to help in reducing the poverty.
- opening new branches in Jordan in order to offer our services near the customers.
- install and operate new ATMs ,and replace the old ones.
- strengthen and develop the principles of corporate governance at the bank.
- continue the application of Basel II requirements.
- introducing new techniques to the banking system.