Islamic Finance and Economic Development: Risk, Regulation, and Corporate Governance

APPENDIX

Islamic Finance: The International Landscape

Islamic finance is a significant part of the financial landscape of numerous countries. Iran, Gulf Cooperation Council (GCC) countries, Malaysia, and Sudan have been at the forefront of its development. This appendix provides an overview of the international landscape of Islamic finance.

While Islamic finance dates back to the early days of Islam, it has experienced a new life since the early 1970s and a tremendous explosion since the beginning of this new millennium. That explosion is manifest in the spectacular growth of the number and size of institutions offering Islamic financial services (IIFSs), their geographical spread across numerous countries, the diversity of their activities, and the growing body and quality of regulations attending to the sector.¹

The present overview is also a statement that Islamic finance should be considered on the basis of facts and analysis and not ideology. Islamic financial services (IFS) are a fact on the ground. Institutions offering IFS pledge to respect a code of behavior based on values. The code's principles are enshrined in the contracts and product offerings. It happens to use the word Islamic as an umbrella qualification of its observance of the code. Possibly for that reason, in the current international context it gathers champions and advocates; it attracts many who see in it merely a business opportunity; it raises open (sometimes vehement) as well as silent opposition; and ...