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Islamic Banking assets more than $ 300 worldwide: Ishrat Husain. |
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The world’s largest grouping of Muslim nations, the 57-member Organisation of the Islamic Conference (OIC), sees Islamic finance as a way to stamp out poverty among its 1.8 billion people and close the gaps between members who range from wealthy Saudi Arabia and Kuwait to poor African states such as Sudan. Islamic finance calls for greater risk-sharing among banks and debtors than conventional banking, and advocates had hoped it would speed business development by getting banks to focus on the potential of the projects funded rather than the collateral on offer, he added. But the idea of sharing profits - as well as losses - as the basic instrument of financing activities had never really taken off, Nienhaus, president of Germany’s Marburg University and a consultant to Malaysia on Islamic finance, told Reuters. Wilson said banks had found it easier to evolve commercial banking products based on Islamic principles rather than products directed at small borrowers. “If you think of things like microfinance and so on, it has not really taken off in terms of sharia-compliant micro-finance, because we have got limited microfinance experiences around the world,” he said. The Islamic financial system, founded about 30 years ago, has banking assets of more than $300 billion, and the Malaysian government estimates that they are growing between 10 per cent and 15 per cent a year. Islamic banking takes a more integrated, holistic approach to the needs of investors than conventional banking, but has temporarily had to adopt some features from its competitor, Ishrat Husain, a Pakistani central banker, said.
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