Sample Essay

The Islamic banking market has grown considerably in the last 30 years and is predictable to continue to grow strongly. Volumes are hard to measure because of the growing number of conventional banks that provide Islamic finance/services through an ‘Islamic window’ or branches nevertheless which do not report volumes individually in financial statements. This increase arises because of the speedy build up of wealth in many Islamic countries, for the most part the oil richGulf States, where a large middle income group has emerged.


Increasing responsiveness of, and sensitivity to, Islamic issues has also played an important function. However, of the many Islamic banks that exist these days, only not many have equity of over USD100m. The expansion pattern in Islamic banking has been contrary to that seen in western markets over latest years. Whereas for the latter the focus has frequently been on consolidation, Islamic banks have burgeoned in reply to increasing demand. In spite of this growth, many countries have just a single or a small amount of Islamic financial institutions. Consequently, the penetration of Islamic assets as a percentage of the system total is not so large; in the majority cases less than 10% and often less than 5%, even in Arab countries generally associated with Islamic finance. The number is significantly higher or even 100%, in countries for instance Iran and Brunei.

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