National Australia Bank’s Islamic Finance Grew 28% in 2024

National Australia Bank’s (NAB) Islamic finance for businesses has grown 28% in the past year as more customers are seeking out tailored financing options, the bank said.

To help even more Australian businesses grow, customers can now use the Islamic finance option to acquire another business, purchase equipment and buy livestock, and will no longer need to use property as security.

Dr Imran Lum, NAB Head of Islamic Finance said that more business customers were interested in this type of financing, with the bank seeing steady growth since its launch back in 2021.

State-wise, New South Wales has led the growth in Islamic business finance (54%) and was followed by Victoria (34%) and Queensland (8%0 respectively.

According to Dr Lum, more Muslim Australians were looking for business funding that fits their values and beliefs. The growth NAB was seeing showed just how much this offering has resonated with these customers.

“We are proud to be the only major Australian bank offering specialised Islamic financing for businesses, and we are excited to make it available to more customers. Not every business has property to use as security, that shouldn’t stop them from accessing the finance they need to grow,” he said.

“It’s also not just Muslim-owned businesses that are benefiting from this product. In many cases, we have financed non-Muslim businesses that have requested this type of financing because they have a Muslim partner or investors with a preference for Islamic financing,” Dr Lum added.

NAB business customer Fawaz Khodary and his three brothers built Your Discount Chemist back in 1994, opening their first of now 13 stores in regional New South Wales.

With the help of NAB’s Islamic financing, Fawaz and his brothers have continued to expand the pharmacy’s footprint, recently constructing their first warehouse in Port Macquarie where most of their stores are situated.

“We were operating and coordinating inventory from the back of one of our stores, but we were losing sales because of limited space and stock,” Khodary said.

They now have a new warehouse. It was a big investment, but they will now be able to keep up with demand, including the end-of-year holiday rush.

When Khodary moved to Port Macquarie, he took out a home loan with NAB before becoming a business banking customer. The close partnership he built with his business banker led to discussions about the bank’s Islamic finance offering

“We are always looking for ways to innovate, so inclusive financing such as NAB’s Islamic finance helps us continue to invest in our business in a way that aligns with our values and beliefs – definitely a game changer for us,” Khodary added.

Wide Opportunities

The Islamic finance sector is gaining ground in Australia as the country has young Muslim population, which is looking at sharia-compliant products for many years. Besides attracting foreign direct investment (FDI), Australia can also attract a plethora of companies engaged in Islamic banking to open their businesses in the country.