Excerpt:

In the West we have, over many years, created a range of financial instruments to meet the needs of business, of investors and of the man and woman in the street. In the recent past, institutions in the Islamic world have developed a parallel set of instruments which seek to fulfil those needs in a way which is consistent with sharia law.

Islam dates its foundation to the year 622 CE, when the prophet Muhammad fled from Mecca to Medina in the incident which Muslims celebrate as the Hijra. However, Islamic finance as we now know it has a much shorter history, having its origins in the post-war world.

To the extent they think about such things at all, it is probable that many in the West regard Islamic finance as a harmless eccentricity. Some may see its arrival in Europe and North America as an unwelcome intrusion. Few would ever take the time to examine its underlying principles.


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