Dr. Etsuaki Yoshida, Director and Senior Economist for the Country Credit Department of the Japan Bank for International Cooperation (JBIC) gave a presentation on Islamic finance at the Third IIUM-Kyoto University Research Colloquium (IIUM: International Islamic University Malaysia) held in Malaysia on December 2 and 3, 2015. As part of a research exchange program between the Kulliyyah (Faculty) of Architecture & Environmental Design (KAED) of IIUM and the Graduate School of Management, Kyoto University, the third such conference was held under the theme of "Understanding Shari'ah and Its Application in Construction."
Under the title, "The 3 R's in Islamic Project Finance: its relevance under Maqasid al-Shari'ah," Yoshida explained, while making reference to Riba (meaning "interest" in Arabic), Recourse and Risk sharing, that Islamic project finance*1 would be preferable in terms of principles of Islam because lenders in such transactions bear some of the risks associated with projects, rather than ordinary full-recourse financing method in which the borrower is wholly responsible for repayment as well as project risks.
Islamic finance goes beyond the Islamic countries in the Middle East and Southeast Asia; it has been developing across the world, including non-Islamic countries. Japanese banks have noticeably begun to be involved in Islamic finance, especially after the 2015 revision of the Comprehensive Guidelines for Supervision by the Japanese FSA. Some of the project finances provided by JBIC are related to Islamic finance, and in such way, Islamic project finance is becoming more significant as a field which offers a new risk profile.
JBIC will continue to foster the understanding of the leading sectors of international finance through academic conferences as well as exchanges with overseas experts, and exercise the financial intermediary functions unique to JBIC.