Identifying growth opportunities in Islamic finance
Islamic finance is available in 56 countries through 1,389 sharia-compliant companies that have total assets under management (AUM) of $2.4 trillion, according to a 2018 study from Thomson Reuters. This article explores how to improve and explore the products, structures, and executions of Islamic Financing in line with the global trend in the financial sector.
Islamic banking or Islamic finance or sharia-compliant finance is banking or financing activity that complies with sharia (Islamic law) and its practical application through the development of Islamic economics. Some of the modes of Islamic banking/finance include profit-sharing and loss-bearing, safekeeping, joint venture, cost-plus, and leasing.
In the middle of the 20th century, some organizational entities were found to offer financial services complying with Islamic laws. The first, experimental, local Islamic bank was established in the late 1950s in a rural area of Pakistan which charged no interest on its lending By 1995, 144 Islamic financial institutions had been established worldwide, including 33 government-run banks, 40 private banks, and 71 investment companies. By 2008 Islamic banking was growing at a rate of 10–15% per year and continued growth was forecast. As of 2015, $2.004 trillion in assets were being managed in a sharia-compliant manner according to the State of the Global Islamic Economy Report. (Excerpt from Wikipedia)
Many banks deliver Islamic finance transactions and many large professional services firms have specialist Islamic finance teams. This article proposes that project teams should be formed to explore how the bank should look at this business opportunity.
What is the current business challenge?
To improve and explore the products, structures, and executions of Islamic Financing in line with the global trend in the financial sector. To develop new products and increase our loan portfolio with new customers.
What is the goal of this project?
- Analyze and understand the product in terms of Country banking law, legislation, use, structure, market, and local implementations
- Participant Banks’ experiences and scope in Country
- Research and analyze the global implementations and structures of Islamic Finance
- Combine the local and international data and adapt it for your Bank
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