Islamic Capitalism and Finance
Show Less

Islamic Capitalism and Finance

Origins, Evolution and the Future

Murat Çizakça

This illuminating and thought-provoking book questions whether classical Islamic capitalism, which has served Muslims so well for centuries, can provide a viable alternative world economic system. In the current recession – the worst since 1929 – this is surely a provocative question. But if Islamic capitalism is to emerge as a viable alternative, its nature and systems must be well understood.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 9: The Birth and Evolution of Modern Islamic Banking

Murat Çizakça


Never accept conventional bankers into the Islamic banking sector! Dr Ahmad al-Naggar, the Father of Islamic Banking Introduction Recent research has revealed that the value of total global assets and assets under management of Islamic finance reached US$951 billion in 2008 and is expected to reach US$1 trillion by 2010 and US$1.6 trillion by 2012. These assets are expected to generate revenues of US$120 billion. Commercial banks accounted for 74 per cent of the 2008 figure, with investment funds, sukuk, other funds and takaful accounting for 10, 10, 5 and 1 per cent respectively.1 Research has also shown that Islamic banks are growing more rapidly than the average banking sector in most countries. Indeed, the rate of growth of the Islamic financial services industry, as a whole, has exceeded 20 per cent annually since 2000. In 2005 this rate of growth of the assets held by Islamic banks (and windows) was 28.6 per cent. By contrast, during this period, the world’s top 1000 conventional banks achieved an annual asset growth of just 6.8 per cent as of July 2009. The sub-prime crisis affected the Islamic and conventional banking systems in very different ways. While the combined market capitalization of top ten conventional banks suffered a huge decline of 42.8 per cent, Islamic banks suffered merely a decline of 8.5 per cent for the period 2006–9. By the same token, while net profits of conventional banks fell dramatically from US$116 billion to a net loss...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.