The Accounting & Auditing Organisation for Islamic Financial Institutions said only 85pc of all Islamic bonds issued by global banks met their rigorous standards earlier this year.
Muslims are not allowed to earn interest on loans or profit from money invested in gambling, alcohol or guns.
Specialist bonds known as sukuk satisfy Islam's ban on interest by allowing investors to profit from the exchange of assets, rather than money, but Bahrain-based scholars ruled that many are unlawful because they do not involve a transfer of tangible assets.
The sukuk market, which financed Dubai's Palm Island development - where David Beckham and Donald Trump have homes - had been doubling since 2004. However, sales declined to $11bn (£6bn) from January to August this year, compared to $21bn during the same six months in 2007.