Finance Islamique: Fondements, Etats Des Lieux Et Perspectives

Abstract

After some modest attempts to establish Islamic Financial Institutions (IFI's) during the early sixties, the real beginning of the Islamic financial industry took place during the mid-seventies. Fundamentally different from the conventional financial model, Islamic finance is based on a set of principles referred to as Shariah (Islamic law). The most important among them are the profit and loss sharing, the prohibition of interest, the asset-backing principle, and the prohibition of speculation and uncertainty. By applying these principles, the Islamic financial system was established to take into consideration, besides religious aspects, moral, ethical and social dimensions. It was also deemed to be more stable than the conventional system. In recent years, Islamic banking and finance has been recognized as a rapidly-growing part of the financial sector. This was a result of the increasing attention to Islamic investments driven by the recent innovations in Islamic finance. Thus, the industry of Islamic banking and finance is estimated to be worth 900 billion US Dollars, managed by more than 500 IFI's around the world, and it is growing at a rate of 15% per annum globally (from 12% to 30% depending on market segments.) The goal of this research is to attempt to study the similarities and differences between conventional and Islamic financial systems. It will carried out through a) surveying the current literature; b) examining the conventional instruments from the stand point of Shariah, and c) suggesting potential alternatives that Islamic laws bring into the conventional system in the case of non-compliance. After describing the basic framework of the Islamic financial industry, the first market segment that this research will study is the banking system. Next, it will extend the study to the investment funds, derivatives, money market, stock market, insurance industry, and Islamic securities.