Can Islamic Finance go micro?
With more than half-a-trillion dollars in assets and an annual growth rate that has outpaced conventional banks’ by nearly 50 percent, the Islamic finance industry is already making waves among investment fund managers. And this not only applies to the Muslim world: The Banker magazine recently named the United Kingdom to its list of the top 15 countries managing Sharia-compliant assets. The new CGAP Publication Islamic Microfinance: An Emerging Market Niche, argues that the Islamic finance industry, with its unprecedented popularity and growth, may be well-placed to address a critical need in microfinance: reaching the some 72 percent of people in Muslim-majority countries who do not use formal financial services. Much of that gap owes to unmet demand for products that comply with Islamic law, or Sharia, according to Aamir A. Rehman, former Global Head of Strategy with HSBC Amanah. “Sharia compliance can help microfinance institutions reach a large number of Muslims who prefer Sharia-
