LONDON, Sept 24, 2006 (AFP) – Islamic finance is soaring around the world owing to an influx of petro-dollars from the Middle East and growing demand by investors, both Muslim and non-Muslim, according to analysts.
The Islamic finance sector, compatible with Sharia law based on the Koran, is now worth between 300 and 500 billion dollars (237 and 394 billion euros), economists estimate, compared with 200 billion dollars two years ago.
The number of Islamic retail banks and investment funds number in their hundreds and Western financial institutions are increasingly offering products that comply with Sharia law, including Citigroup, Deutsche Bank, HSBC, Lloyds TSB and UBS.
Islamic finance bans the earning and payment of interest and forbids investment in businesses linked to the alcoholic drinks and gambling sectors.
Japan will be the first major industrialised country to issue Islamic bonds if the Japan Bank for International Cooperation goes ahead with a recently-announced plan aimed at attracting money from oil-rich Muslim countries.
“The (Islamic finance) industry is doing better than ever,” said Rodney Wilson, director of postgraduate Islamic studies at Durham University, northeast England.