Islamic Finance a Global Alternative And Socially Responsible Investment

Principles of Islamic Finance
Almost three decades ago, the concept of Islamic finance was considered wishful thinking.
Today, more than 400 Islamic financial institutions are operating worldwide, estimated to be managing funds in the region of USD $1.3 Trillions. Their clientele are not confined to citizens of Muslim countries, but are spread over Europe, the United States of America and the Far East.
Muslims now have the opportunity to invest their finance according to Islamic teaching. The religion of Muslims is not just a religion; it’s a complete way of life that has a set of goals and values encompassing all aspects of human life including social, economic and political issues.
Islam is not a religion in the limited sense of the word, concerned only in man’s salvation in the life to come and hereafter; rather it is a religion that organizes life completely, particularly in Mouaamlat ( financial dealings between peoples or in modern dictionary Economic).
The body of Islamic Law is known as “Shariah”, and the exact literal translation of “Shariah” is “a clear path to be followed and observed”.
Shariah is not a codified law.
It is an abstract form of law capable of adaptation, allowing new development and further interpretation. The Shariah does not prescribe general principles of law; instead, it conveys to deal with and cover specific cases or transactions and sets out rules that govern them.
The Shariah developed through four major Islamic juristic schools (Hanafi, Maliki, Shafi and Hanbali) and is derived from two primary sources, the Qura’n (the transcription of God’s message to the Prophet Mohammed) and Sunna (the living tradition of the Prophet Mohammed), in addition to two dependent sources, namely ijma (consensus) and ijtihad and qiyas (individual reasoning by analogy).
The recent surge of religious awareness amongst Muslims has provided the drive towards implementing and adopting Islamic principles in financial transactions, In an attempt to purify assets in the eyes of Islam.
Muslims are seeking a greater balance between their lives in the modern technological world and their religious faith and beliefs.
Among the most important teachings of Islam for establishing justice and eliminating exploitation in business transactions, is the prohibition of all sources of unjustified enrichment and the prohibition of dealing in transactions that contain excessive risk or speculation.
For that reason, Islamic scholars have figured out from the Shariah two principles that form the benchmark of Islamic economics and which distinguish Islamic finance from its conventional counterpart.
• Riba or Usury
• Gharar

1. Riba The Prohibition of Interest
The prohibition of Riba is clearly the most significant principle of Islamic Finance.
Riba translates literally from Arabic as “an increase, growth or addition”. In Islam, lending money should not generate unjustified income.
As a Shariah term, it refers to the premium that must be paid by the borrower to the lender along with the principal amount, as a condition for the loan or for an extension in its maturity, which today is commonly referred to as interest.
Riba represents, in the Islamic economic system, a prominent source of unjustified advantage. All Muslim scholars are adamant that this prohibition extends to any and all forms of interest and that there is no difference between interest-bearing funds for the purposes of consumption or investment, since Shariah does not consider money as a commodity for exchange. Instead, money is a medium of exchange and a store of value.
Profit and Loss Sharing is a form of partnership, and it is the substitute of Riba, where partners share profits and losses on the basis of their capital share and effort.
Unlike interest-based financing, there is no guaranteed rate of return.
Any transaction involves Gharar is prohibited (Gharar means uncertainty and speculation).
Parties to a contract must have actual knowledge of the “subject matter” of the contract and its implications.
For example; an agreement contaminated with Gharar is an agreement to sell goods, which have been already lost.
Let us look at Islamic Financing Techniques
Islamic scholars have approved certain basic types of contracts as being compliant with the principles of Islamic finance, and which Islamic banks to attract funds and to provide financing in a truly Islamic way.
Before going into the peculiarity of each contract, in general, there are four conditions required to affect a valid Islamic contract:
1. The price for the goods should be agreed mutually between the parties and not under duress
2. The subject matter of the contract (At the time of contract) should be in existence and able to be delivered without uncertainty or deception
3. The contract should not be based upon a consideration that is itself prohibited under the Shariah (e.g. alcohol, pork products, etc.)
4. There must be a lawful purpose for the obligation arising out of the contract.

Major Islamic contracts

Mudaraba (Trust Financing)
Mudaraba is a form of partnership in which one partner provides the capital required for funding a project (Rabul-amal), while the other party (known as a Mudarib), manages the investment using his expertise. Profits arising from the investment are distributed according to a fixed, pre-determined ratio.
The loss in a Mudaraba contract is carried by the capital-provider unless it was due to the negligence, misconduct or violation of the conditions pre-agreed upon by the Mudarib.
In a Mudaraba, the management of the investment is the sole responsibility of the Mudarib, and all assets acquired by him are the sole possession of Rab-ul-amal. However, the Mudaraba contract eventually permits the Mudarib to buy out the Rab-ul-amal’s investment and become the sole owner of the investment.
Mudaraba may be concluded between the Islamic bank, as provider of funds, on behalf of itself or on behalf of its depositors as a trustee (please note this has a different meaning to the English law concept of trustee) of their funds, and its business-owner clients. In the latter case, the bank pays its depositors all profits received out of the investment, after deducting its intermediary fees. It may also be conducted between the bank’s depositors as providers of funds and the Islamic Bank as a Mudarib.
Mudaraba can either be restricted or unrestricted. Where unrestricted, depositors authorize the bank to invest their funds at its discretion. In the restricted Mudaraba, the depositors specify to the bank the type of investment in which there funds should be invested.
Musharaka (Partnership Financing)

Musharaka is often perceived as an old-fashioned financing technique confined in its application to small-scale investments.
Although Musharaka is substantially similar to the Mudaraba, the difference in that is, all the parties involved in a certain partnership to provide capital and management towards the financing of the investment.
Profits are shared between partners on a pre-agreed ratio, but losses will be shared in the exact proportion to the capital invested by each party.
This gives an incentive to invest wisely and take an active interest in the investment. Moreover, in Musharaka, all partners are entitled to participate in the management of the investment, but are not necessarily required to do so. This explains why the profit-sharing ratio is left to be mutually agreed upon and may be different from the actual investment in the total capital.
In a typical Musharaka between a bank and a customer (i.e., partner), at the time of distribution of profits, the customer pays the bank its share in the profits and also a pre-determined portion of his own profits, which then reduces the bank’s shareholding in the investment. Eventually, the customer becomes the complete and sole owner of the investment. “A company is a contract whereby two or more persons are bound each to participate in a financial project by providing a share of property or work for the exploitation of that project and the division of any profit or loss which may arise throughout.”
Morabaha (Cost-plus Financing)

Morabaha is the most popular form of Islamic financing techniques. Within a Morabaha contract, the bank agrees to fund the purchase of a given asset or goods from a third party at the request of its client, and then resells the assets or goods to its client with a mark-up profit. The client purchases the goods either against immediate payment or for a deferred payment.
This financing technique is sometimes considered to be similar to conventional, interest-based finance. However, in theory, the mark-up profit is quite different in many respects.
The mark-up is for the services the bank provides, namely, seeking out, locating and purchasing the required goods at the best price. Furthermore, the mark-up is not related to time since, if the client fails to pay a deferred payment on time, the mark-up does not increase due to delay and remains as pre-agreed. Most importantly, the Bank owns the goods between the two sales and hence assumes both the title and the risk of the purchased goods, pending their resale to the client. This risk involves all risks normally contained in trading activities, in addition to the risk of not necessarily making the mark-up profit, or if the client does not purchase the goods from the bank and whether he has a justifiable excuse for refusing to do so. However, the Organisation of the Islamic Conference (“OIC”) has declared that a customer’s promise to purchase the goods in a Morabaha is an ethically binding promise. Accordingly, the OIC Academy has held that the customer is bound to compensate the bank for any out of pocket expenses the latter incurs as a result of the refusal of the customer to purchase the goods.
The purchase of goods under the Murabaha contract may be funded by the Islamic Bank either from its own funds, or from the funds of its depositors. In the latter case, the bank acts as its depositors’ agent, retaining its fees from the mark-up profits. In such circumstances, the depositors will own the purchased goods during the period pending its resale, and therefore assume its risk.
Ijara (Leasing)

Ijara is defined as sale of Manfa’a (i.e., sale of right to utilise the goods for a specific period). The Ijara contract is very similar to the conventional lease. Under Islam leasing began as a trading activity and then much later became a mode of finance. Ijara a contract under which a bank buys and leases out an asset or equipment required by its client for a rental fee. The jargon accorded to the financier, that is the bank, is “lessor”, and to the client, “lessee”.
During a pre-determined period, the ownership of the asset remains in the hands of the lessor who is responsible for its maintenance so that it continues to give the service for which it was rented. Likewise, the lessor assumes the risk of ownership, and in practice seeks to mitigate such risk by insuring the asset in its own name. Under an Ijara contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval. This is to ensure that the rental remains in line with prevailing market leasing rates and the residual value of the leased asset.
Salam (Advance Purchase)

Salam is defined as forward purchase of specified goods for full forward payment. This contract is regularly used for financing agricultural production.
A forward sale is for property, the delivery of which is deferred, against a price payable immediately
The property must be such as can be specified by description and quantity, and it must normally be available at the time of delivery; and The contract must contain particulars of the nature, type, description and amount of the goods, and the time at which they are to be delivered.
Istisna’a (Commissioned Manufacture)

Istisna’a is a new concept in modern Islamic finance that offers a number of future structuring possibilities for trading and financing. In this contract, one party buys the goods and the other party undertakes to manufacture the goods, according to agreed specifications…
Islamic financial practice holds that the contract is binding on both parties at the outset. Islamic banks frequently use Istisna’a to finance construction and manufacturing projects.
Shariah principles of Istisna’a are to apply in the case of construction contracts (Muqawala) “A muqawala is a contact whereby one of the parties thereto undertakes to make a thing or to perform work in consideration which the other undertakes to provide”.
Quard-Hasan (Interest-free Loan)

The Quard-Hasan mechanism effectively amounts to an interest-free loan either to corporate customers in financial distress, (which later might be converted into an equity stake in the enterprise), or to individual clients for welfare purposes.
In making the loan available, the bank may take security for the loan (e.g. mortgage over the customer’s premises) and some may charge a nominal fee. The service charges are not for profit; they are the actual costs recovered under one important condition, (to prevent the charges from becoming equivalent to interest), that the charge cannot be made proportional to the amount or to the term of the loan.
Takaful (Mutual Insurance)

The model of Takaful offers clear guidelines for the establishment of Islamic banking insurance that substitutes its conventional counterpart. The modern conventional system of insurance is contrary to the Shariah because of its unjust, interest-based nature.
Takaful aims to provide security and protection to its participants in a way that is seen to be socially responsible and fair.
It refers to the pool of payments by a group of participants of an agreed sum into a common fund that will be managed in accordance with the Shariah, particularly the Mudaraba contract. In case of the occurrence of the insured event, the participant benefits through claiming compensation from the fund. In the absence of the claim, the participants share the surplus of the invested funds.
Conventional insurance companies manage the funds of its clients on their behalf. Similarly in Takaful, the Islamic Bank is a trustee (not to be confused with the legal concept of trustee under English law) managing the funds of the participants for a fee. Thus, each participant retains title over its share of the funds, and under certain conditions may withdraw its share.
However, in practice, it is seen that the pure Islamic nature is detracted from concept of Takaful. The reason behind this is that the takaful funds are currently reinsured on a conventional basis due to the lack of a developed Islamic reinsurance market.

Islamic Instruments for Primary Markets

Islamic finance is constantly developing mechanisms to enter into the primary market. The most common Islamic financial mechanisms are as follows:
Mudaraba Funds
Many investors get together to become shareholders in large financial projects through the mechanism of the Mudaraba. The Islamic Bank’s role in these funds is to act as the Mudarib to use these funds to finance a large project. This Mudaraba fund can be utilised by the bank in conducting its business using any of the Islamic contracts, such as, Murabaha, Ijara’a, Salam or Istisna’a.

Companies with Common Shares
On a worldwide basis, companies that issue their shares as stocks generate investment securities. Purchasing stocks in Companies with Common Shares is similar to purchasing shares of Public Joint Stock Companies.
The Organization of Islamic Conference (OIC) has approved the purchasing of shares of such companies; provided that these companies are not formed for anti Islamic purposes, such as pork trade, liquor production etc. In order for this to work, the western legal principles of the limited liability of shareholders and the artificial personality of companies have been accepted.

Muqarada Bonds
This is similar to a revenue bond. An existing company (a Mudarib) issues Muqarada bonds to investors (who are Rab-Al-Amal) to generate the finance required for a new project. This new project must be separate from the issuing company’s general activities. Once the profits of this separate project are distributed, they are apportioned according to the percentages agreed between the Mudarib and the Rab-Al-Amal.
The holders of such Muqarada bonds may later become shareholders in the issuing company, depending on the terms of the issuance of the Muqarada bonds.

One of the most successful Islamic capital market instruments is SUKUK
The accounting and Auditing Organization for Islamic Financial Institutions (AAOFI for short) has defined Sukuk as “ A certificate of equal value representing undivided shares in ownership of tangible asset, usufruct and services OR in the ownership of the assets of particular products or special investment activities(u·su·fruct means the legal right to use and enjoy the advantages or profits of another’s property).
AAOFI defined 14 types of Sukuk, the main ones are:
• Ijara Sukuk (Leasing)
• Certificates of ownership of usufructs (e.g. Sukuk Manfa’at al-Ijara)
• Salam Sukuk (deferred commodity delivery)
• Istisna’a Sukuk (manufacturing or project finance)
• Mudaraba Sukuk (partnership/finance trusteeship)
• Murabaha Sukuk certificate (Joint venture)

Other Variations / Hybrids of Sukuk
• Certificates of ownership of usufructs
• Existing assets

Future assets Services of a specified suppliers (present & Future)
• General Participation
• Musharaka
• Mudaraba
• Muzara’a (Sharecropping)
• Musaqaa (Irrigation)
• Concession (Infrastructure project finance)
• Salam (Commodity)

Unique attributes of Sukuk
• Marketable
o They are Liquid
o They are Easley transferable
o They are Tradable
• Retable (i.e. They can be rated by most rating agencies)
• Can easily be credit enhanced
• Versatile
• Different legal and fiscal domains
• Fixed over variable income Compatibility with Reg S.Out of the box thinking allowed

Let us see the difference of Sukuk Compared to Bonds

Sukuk Bonds
Sukuk represent ownership stakes in existing and/or well defined assets Bonds represent pure debt obligations due from the issuer
The underlying contract for a Sukuk issuance is a permissible contract such as lease or any of the other 14 categories defined by AAOIFI The core relationship is a loan of money which implies a contract whose subject is purely earning money on money (Riba)
The underplaying assets mentioned in a Sukuk issuance must be Islamically permissible in both their nature and use e.g. a truck would always be an eligible asset but not its lease to a distillery Bonds , can be issued to finance almost any purpose which is legal in its jurisdiction
Asset-related expenses may attach to Sukuk Holders Bond holders are not concerned with asset-related expanses
The Obligor’s creditworthiness & Sukuk prices depends on the market value of the underlying asset Bonds depends solely on the creditworthiness of the Issuer (incase of bankruptcy of the issuer, bond holders loose their bonds value)
The sale of a Sukuk represents a sale of a share of an asset The sale of a bond is basically the sale of a debt

Let us compare Sukuk with Bonds and Shares

Sukuk Bonds Shares
Nature Not debit but undivided ownership share in specific assets/projects/services Debt of Issuer Ownership shares in a corporation
Asset Backed A minimum of 51% tangible assets (or their contracts are required to back issuance of Sukuk al-Ijara Generally not required Not required
Claims Ownership claims on the specific underlying assets/projects/services Creditors claims on the borrowing ,and on assets Ownership claim on the company
Security Secured by ownership rights in the underlying assets or projects in addition to any additional collateral enhancements structured Generally unsecured debentures except in cases such as first mortgage bonds etc Unsecured
Principal & Return Not guaranteed by Issuer Garneted by the Issuer Not garneted by the company
Purpose Must be issued only for Islamically permissible purpose Can be issued for any purpose Can be issued for any purpose

Challenges faces Islamic finance in Product Design and Distribution
• As global capital market grew fast issuance and creative product design are too slow to cope with the market expansion
• A secondary market for Islamic securities is also growing fast, the asset management are required to develop and distribute portfolio management products.
• Financial institutions still face several hurdles in reaching full market capacity
• Shortages of Islamic scholars. In order to comply with Shariah law trained scholars is needed in a greater number of individuals are needed with the dual training in Shariah and financial markets.
• No standard Shariah law. Shariah law interpretations vary by country, particularly in the Middle East versus Southeast Asia. Although the efforts of organizations, such as IFSB, IIFM, IIR, and IDB, are making strides in opening communications, differences may continue to exist. Therefore, Muslims may not universally accept products.
• Which comes first? Secular law versus Shariah law. With exceptions such as Saudi Arabia, Yemen, and Iran where secular law is Shariah law, most governments uphold national law, not Shariah law, as the final law to be applied in litigation. This can create potential litigation or lack of recourse issues.
• Lack of regulation and consumer protection in most developing countries.
• Some market participants feel that the regulatory environments in developing countries are severely scarce in oversight and consumer protection
• Lack of Shariah products not always serves the general population well. An example is the potential for an exorbitant mark-up in a profit sharing lending scheme.
• Banking products & Islamic investment versus long-term investment portfolio needs to be screened
• No standard documentation, Operational aspects of product origination, trading and settlement can be quite complex with fixed income and derivative instruments.
• The International Swaps and Derivatives Association (ISDA) and Bahrain-based International Islamic Financial Market (IIFM) are active on this front.
• Lack of investment education, While the public in Western countries is generally bombarded with investment education, such resources are not always available in other parts of the world.
• Lack of savings, with negative savings rates and a state welfare system in Gulf Arab region, broad adoption may be difficult, there is cultural dependence upon extended families for financial resources. According to The World Bank, the savings rates are only relatively better in South Asia.
• Foreign firms: present, needed, but welcome? While Islamic countries are dependent upon the global powerhouses to help build a thriving secondary market for securities
• Some Shariah scholars will not recognize an ‘Islamic window’, an instance where a conventional financial institution sets up a product, division, or private company to launch an Islamic product. The feeling is that the firm itself does not comply with Shariah; therefore, by association an Islamic Window will not be in compliance. This can apply to domestic firms as well, for example, the Shariah bank with a ‘conventional window’.
• Islamic finance centers are slowly opening up to global financial institutions, which will further efforts to support strong secondary markets in Islamic debt and equity. Similarly, large, well-resourced and creative institutions are, and will continue to, rapidly develop the capital markets across asset classes.
• The securities markets in the Gulf are not as large as western markets, which means there are far fewer security selections for asset managers.
• Southeast Asia is also still developing, Malaysia, with 1,000 listed companies, is considered a large sector. Countries in the Middle East and Southeast Asia must attract listings and new securities products to promote growth in the financial services industry.
Can Islamic investment and Banking Appeal to non-Muslims?

Islamic banking, based on the Shariah principle that banks should not charge loan interest, is also attracting non-Muslims and is growing aggressively. But can ethically based banking compete with the global debt-based system? Asif Iqbal, head of legal and compliance at iHilal, looks at the ethical arguments supporting Islamic financial practice.
Some commentators consider judgments on the potential of Islamic banking to be premature as it is an industry in its infancy, while others consider Islamic financial practice to be the answer to problems created by the conventional debt-based money system. Which group is right? Could they both be right? And how realistic are Islamic bankers’ dreams of penetrating non-Muslim markets as a global alternative to conventional finance?
At the risk of over simplifying, the essence of Islamic finance is that all parties engage in trade without any use of Riba (interest). The Shariah rules governing the prohibition of Riba are well known to most, and the values underpinning the rules are righteousness, benevolence and fair profit. Muslims and non-Muslims alike share these values, with most people wanting to govern their personal and business affairs in accordance with these basic, yet extremely important, ethics.
While the majority of conventional bankers will of course conduct their business in a principled manner, the nature of the interest-based money system is nonetheless at odds with Shariah. Conventional finance models treat money as a commodity, and the global Forex markets see billions of dollars traded every day, but the majority of these trades are speculative and are often underpinned by complex derivative structures. In reality these trades are ‘virtual’ trades and nothing more.
In contrast, Shariah prohibits the trading of money as a commodity for a number of different reasons. Firstly, money is considered not to have any intrinsic value. Secondly, whereas commodities can be of different qualities, the same cannot be said of money. Thirdly, units of money of the same denomination cannot be identified in any given transaction; i.e. the $100 bill shown at the time of negotiating a sale need not necessarily be the same $100 bill that is exchanged to consummate the transaction. In simple terms, Shariah distinguishes between money and commodities because the intended use of money is to act as a measure of value rather than to be the subject matter of a trade.
Imam Al Ghazzali, when discussing the nature of money, commented that “all these commodities need a mediator to judge their exact value…Allah Almighty has, therefore, created dirhams (money) as judges and mediators between all commodities…and their (dirhams) being the measure of the value of all commodities is based on the fact that they are not an objective in themselves”.
Debt begets debt
Goldsmiths of medieval Europe first employed the concept of creating money out of money. Through their simple system of lending gold, the goldsmiths realized that they had the ability to lend more than they actually had. Their lending was therefore increased in the form of gold deposit receipts. It is this basic principle that has been followed over the years, and as we see now, has evolved itself into the modern debt-based money system. Analysis of various economic data shows that the volume of coins and notes issued by some governments as debt-free money is much lower than the money actually in circulation, the balance being ‘virtual’ money that has been created in the form of loans advanced by institutions. In short, the debt-based money system creates money in parallel to an equivalent quantity of debt with interest.
The problem is that the impact of a debt-based money system has been devastating. The World Bank’s Global Finance Development report shows that total debt continues to rise. Despite ever increasing payments, some countries’ debt obligations far outstrip their total income, meaning that citizens of all religions and ethics suffer economically under their national debt burden. The list of shocking statistics in respect of debt and interest payments is long and well documented, yet relatively few alternative solutions have been offered, and often the best creditors can come up with is to restructure repayments or to waive portions of state debt in times of crisis. The Shariah principles governing financial transactions, on the other hand, promote an equity-based and asset-backed financial system by abolishing the concept of money production and by prohibiting Riba on the advancement of money. Islamic finance is built on the principles of exchange, rather than credit worthiness and the ability to repay loans. This means that a system based on Islamic principles will neither punish people who need access to capital for not having it already, nor allow them to take on the burden of debt.
Non-Muslim support for asset-backed practice
Conventional economists and writers have already recognized the benefits of some of the principles that the Islamic system of finance follows. John Tomlinson, an Oxford-based economist, is Chairman of the Oxford Research and Development Corporation Limited, which explores the use of equity instruments and the development of equity markets for areas of finance currently served by debt. In his book, Honest Money, Tomlinson presents strong arguments for the conversion of the current system to an equity-based. In building his case for a change in the system, Tomlinson cites reasons that are similar to the principles present in the rationale employed for prohibiting Riba, not least the value of focusing on real as opposed to theoretical assets.
Kahf, Ahmad and Homud (1998), in their paper ‘Islamic Banking and Development: An Alternative Banking Concept, conclude that Islamic banking has a wider role to play than merely meeting the needs of the Islamic investor, and that this form of banking can and should be extended to the wider community by its practitioners.
Where to start Of course while Islamic banking could make excellent sense as the foundation of a new money system, the conventional debt-based system is deeply entrenched in every sphere of life, and an overhaul would take many years and would require substantive reviews of legal, accounting and regulatory structures. That said, if Islamic banks and institutions continue their aggressive growth and development of innovative and competitive products, then it will be difficult for the wider non-Muslim audience to ignore the benefits of such a system. It may be too late to entirely replace the debt system, but on the face of it there is no reason why the Islamic system cannot be offered in parallel and promoted as the preferred system. Non-Muslims who are fed up with punitive interest payments, and who are attracted to a system that imposes ethical practices on business leaders, might well be the first to sign up for such services.
If the Shariah principles employed by Islamic banks have allowed them to be profitable, and more recently to achieve double-digit growth figures, then the argument for expanding the net of Islamic banking to the wider community is a compelling one.
Conclusion
On the investor front, market studies have repeatedly shown that if given the option to invest in Shariah products with competitive performance, Muslims prefer to do so. As the Shariah sector moves forward, advancing financial education for investors and improving product distribution will stimulate a response from the retail sector. Today, the institutional market and the ultra high net worth in numerous family offices already deploy assets according to Shariah, many in the real estate and private placement market.
A breakout opportunity for the Islamic asset management business is possible, particularly after 2007, which is a ‘stage setting’ year for many financial institutions in both the capital markets and asset management businesses. General market consensus suggests growth rates in the 15-20% range; Celent feels the global market could average 38% over the 2007-2010 periods, with greater momentum in 2009.
Equity fund assets expected to jump from US$15.5bn to US$53.8bn by 2010, not including the vast amount that will make its way to private placements in alternative investments by institutions and family offices. More financial firms implementing investment programs, growing awareness of investment options and a cash rich investor are the drivers of this growth.
The Shariah-compliant industry is formalizing its infrastructure, building-up assets quickly, and will become a significant and profitable component of the financial services industry globally.

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