Challenges in Islamic Finance

Abstract

The growth of Islamic finance has been observed for the last decades. However Islamic finance is still 1 percent of the whole financial system. It has to overcome some challenges as it grows since it is not growing only in Muslim countries; some questions rise around Islamic finance. Given that the market of Islamic finance is new and fast-growing it is important to understand the differences between conventional and Islamic finance. Are they complements? Are they competing forms of contracts? Will they shape the future (conventional) industry of finance and how? These questions require an integrated understanding of Islamic finance and in particular its relation to conventional products. This paper studies challenges that Islamic finance has to overcome.

Keywords

• Islamic Finance
• Regulations in Islamic Finance
• Transparency in Islamic Finance