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A Future For Islamic Finance?

It's a burgeoning market, but its role as a global alternative finance system remains unclear.


By Aleksandrs Rozens

October 13, 2008

Islamic finance had its start in the 1960s and 1970s with the influx of petrodollars into the Gulf region. The rapid development of Middle East markets--Saudi Arabia, Kuwait and the United Arab Emirates--has stoked interest in a type of finance that is based on the principles of Shari'a. Industry experts estimate that Islamic finance has enjoyed double-digit annual growth with nearly $1 trillion put to work in Shari'a structures. But the specialists on Wall Street who want to bring securitization to other parts of the world may have to consider that the collateral, or debt, repackaged into bonds has to meet strict guidelines that adhere to principles of Islam.

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