Despite its growth Islamic finance faces obstacles

Islamic Finance, although still exotic to many bankers, is well-known to be one of the fastest growing segments in global finance.

The figures related to this sector have become commonly known over the last few years:

• The value of global transactions is estimated to be somewhere between $500bn to $1 trillion.

• Islamic finance grows at 15% to 20% annually, doubling at least every five years.

• The market for Islamic insurances, Takaful, grows at 25% annually, but from a relatively low basis of around $4bn currently.

• There are 470 Islamic financial institutions worldwide.

Less well-known are the obstacles faced by the infant industry. These hurdles have been discussed by the speakers of the forum at the first Middle East International Banking, Financial Technology & Services Exhibition (MEFX) in Dubai.

Sanjay Vig, Managing Director at DIFC-based Alpen-Capital, says that Western regulators such as the Swiss Banking Commission failed to develop clear rules for Islamic Banking: 'The lack of initiative kept the 'the world's safe' from entering Islamic finance as intensively as banks in the UK did.'