There are over 1.7 billion Muslims living around the globe, with distinct life styles, consumption patterns and preferences towards banking and finance.
According to the Global Islamic Finance Report 2012 (GIFR 2012), the Islamic finance industry is valued at approximately US$1.357 trillion at the end of 2011, and is currently estimated to be over US$1.6 trillion.
The industry continues to grow at a rate of between 10-15% per annum.
In 2012, the Islamic banking and finance industry has seen tremendous growth, with sukuk issuances reaching US$121 billion and a number of new countries opening up to Islamic finance and amending laws to facilitate Islamic banking, including (Oman, Egypt, Tunisia and Libya, etc).
“In order to optimize its [Islamic finance’s] potential, there is a need to address current gaps and challenges in the Islamic financial system. In particular, Islamic finance requires the expansion of enabling infrastructures to support its efficient functioning.” HRH Raja Dr Nazrin Shah, the Crown Prince of State of Perak, Malaysia
Islamic banking and finance emerged in the 1970s as a response to overwhelming demand for an ethical and socially responsible economic system.
Countries from the Middle East, South Asia and the Far East took steps to create an enabling framework for Islamic finance. Islamic finance grew rapidly in the late 1990s with Western countries taking interest in Shari’a compliant products.
The portfolio of Islamic financial products has increased and there are Islamic alternatives to most conventional products.
Influential Western economists have on record stated the potential of Islamic economics and finance in rectifying the ills of the current global financial system.
“Perhaps scholars who argue that Islamic financial systems’ prohibition on interest generates massive inefficiencies ought to be looking at these systems for positive ideas that Western policymakers might adopt.” Kenneth Rodoff, Professor of Economics and Public Policy, Harvard University
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