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Islamic Finance Revisited: Conceptual and Analytical Issues from the Perspective of Conventional Economics

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  • Sheng, Andrew
  • Singh, Ajit

Abstract

Islamic finance has come of age. Islamic banking and finance have been growing at a very fast rate, despite apparent serious setbacks (such as interruption of payments in Abu Dhabi in 2009, the Great Recession in Western countries between 2008 and 2010, and the recent turmoil in Middle Eastern countries). The industry, which was valued at a mere $150 million in the 1990s, has increased to nearly $1 trillion. Although it is still a niche market and its share in world finance is quite small, it is nevertheless poised for further rapid expansion as economic development proceeds, particularly in the Muslim world. The current composition of Islamic finance consists of roughly $800 billion in Islamic banking funds; $100 billion in the sukuk (Islamic bonds), and another $100 billion in takaful (Islamic insurance), Sheng (2011) estimates. According to data recently released by Standard & Poor’s, in the first quarter of 2011, $32.4 billon of Islamic bonds (sukuk), were issued, compared with $51.2 billion raised in all of 2010. The engine of the global market up to now has been Malaysia, which accounted for 58 percent of funds raised in the first quarter.

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  • Sheng, Andrew & Singh, Ajit, 2013. "Islamic Finance Revisited: Conceptual and Analytical Issues from the Perspective of Conventional Economics," MPRA Paper 53036, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:53036
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    Cited by:

    1. Zakaria Ali Aribi & Thankom Arun, 2015. "Corporate Social Responsibility and Islamic Financial Institutions (IFIs): Management Perceptions from IFIs in Bahrain," Journal of Business Ethics, Springer, vol. 129(4), pages 785-794, July.
    2. Hasan, Zubair, 2020. "Sustainability, growth and finance from Islamic perspective," MPRA Paper 102307, University Library of Munich, Germany, revised 08 Aug 0220.

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    More about this item

    Keywords

    Islamic finance; Muslim world; takaful; sukuk; Islamic banking; Western world;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G2 - Financial Economics - - Financial Institutions and Services
    • P4 - Political Economy and Comparative Economic Systems - - Other Economic Systems
    • P49 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Other

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