CREDIT MARKETS. DUBAI & ISLAMIC FINANCE
. Dubai International Financial Center

Many conventional forms of banking and insurance have been prohibited or restricted in the Arab world on the grounds that they contravene the tenets of Islam. In recent years, however, there has been a dramatic growth in Islamic or Sharia compliant financial products, reflecting a number of trends including:

. economic development in the Arab world giving rise to infrastructure and other projects which require Sharia compliant forms of financing
. the emergence of an international market in Sukuk (Sharia compliant) bonds
. rising incomes among the Arab population resulting in the need for Islamic consumer financial products (insurance, mortgages, pension plans and investment funds)
. changing demographics in the Arab world resulting in the growing need for pensions and other retirement savings products
. changes in Islamic law such as the approval in1985 by the Grand Counsel of Islamic scholars of the Takaful system as the alternative form of insurance written in compliance with Islamic Sharia

The market opportunity
The current market for Islamic financial products is estimated in excess of $260 billion and is forecast to grow at 12 to 15 per cent per annum over the next ten years. Currently, market penetration amounts to an estimated 20 per cent of the Arab population. This figure is expected to rise dramatically and it is expected that within the next decade, 50 to 60 per cent of the total savings of the world's 1.2 billion Muslims will be in the form of Sharia compliant products.