Islamic finance sector seen to reach $2 trillion by 2015

Source : Khaleej Times

The $1 trillion global Islamic finance industry is set to double in size between 2011 and 2015, recording an annual 20 per cent growth driven by increasing demand for this “credible alternative” to conventional banking in the GCC and Asia.

“The global crisis faced by conventional finance has led to Islamic finance increasingly being viewed as a credible alternative. Issuers and investors have realised that the risk-reward balance in both conventional and Islamic finance are not fundamentally different,” said Stuart Anderson, managing director and regional head for the Middle East at Standard & Poor’s, or S&P.S&P expects the $1 trillion global Islamic finance industry to grow 20 per cent over 2011-15 doubling in size over the period.

Read more at : http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=data/uaebusiness/2012/September/uaebusiness_September222.xml&section=uaebusiness/

What Can We Learn from Islamic Finance?

From blogs.worldbank.org

In over 70 countries, from financial centers in Malaysia to the Middle East, Islamic finance has been growing rapidly around the world. In fact, Shariah-compliant financial assets have increased from about US$5 billion in the late 1980s to about US$1 trillion in 2010. Even more impressive is that this class of financial instruments appears to have avoided many of the worst effects of the recent crisis, making it an increasingly attractive investment vehicle.

Given its rapid growth and relative stability, are there lessons we can garner from Islamic finance? Three years after the onset of the global financial crisis—as regulators are still grappling with how to deal with predatory lending practices, opaque derivatives, and overly leveraged financial institutions—can Shariah-compliant finance challenge our notion of conventional banking?

Perhaps it can. By and large, Islamic finance relies on the core principles of Islam concerning property rights, social and economic justice, wealth distribution, and governance. Two of its main tenants are the prohibition of interest on debt in any form and the removal of ambiguous contracts to enhance disclosure and proscribe deception. Among its other key precepts is a commitment to back all financial contracts by assets and activities in the real economy, as well as an emphasis on the principles of morality and ethics in conducting business.

read more at

http://blogs.worldbank.org/growth/node/8810

source : blogs.worldbank