Products, services and contracts
Banking makes up most of the Islamic finance industry. Banking products are often classified in one of three broad categories,
two of which are "investment accounts":[Note 14]
- Profit and loss sharing modes — musharakah and mudarabah — where financier and the user of finance share profits and losses, are based on "contracts of partnership". These have been called the "real and ideal" modes of Islamic finance as Islam calls for sharing of rewards and losses by all who contribute capital to a commercial enterprise (according to Taqi Usmani and other theoreticians of Islamic finance).
- "Asset-backed financing", "debt-like instruments" such as mark-up (murabaha), leasing (ijara), cash advances for the purchase of agricultural produce (salam), and cash advances for the manufacture of assets (istisna'). These are based on "contracts of exchange", and involve the "purchase and hire of goods or assets and services on a fixed-return basis". The fixed return resembles the interest of conventional banking rather than variable profits and losses, but is called "profit" or "markup", not "interest".
Originally these modes were intended by Islamic banking advocates to be "interim" measures, or to be used for situations where participatory financing was not practical,
but now account for the great bulk of investments in many Islamic banks.
the third category consists of
- Modes based on contracts of safety and security, include safe-keeping contracts (wadi’ah) for current deposits (called checking accounts in the US), and agency contracts (wakalah).
Most Islamic finance is in banking, but non-banking finance such as sukuk
, equity markets, investment funds, insurance (takaful
), and microfinance
is also fast-growing,
and as of 2013 represented about one-fifth of total assets in Islamic finance.
These products — and Islamic finance in general — are based on Islamic commercial contracts and contract law,
with many products named after a particular contracts (e.g. mudaraba
) although they are combinations of more than one contract.[Note 15]
Profit and loss sharing
While the original Islamic banking proponents hoped profit-loss sharing (PLS) would be the primary mode of finance replacing interest-based loans,
long-term financing with profit-and-loss-sharing mechanisms is "far riskier and costlier" than the long term or medium-term lending of the conventional banks — according to critics such as economist Tarik M. Yousef
— and has "declined to almost negligible proportions".
contract is a profit sharing partnership in a commercial enterprise. One partner, rabb-ul-mal
, is a silent
or sleeping partner who provides money. The other partner, mudarib
, provides expertise and management.
The arrangement is similar to venture capital
in conventional finance, in which a venture capitalist finances an entrepreneur, who provides management and labor.
Profits are shared between the parties according to a pre-agreed ratio, usually either 50%–50%, or 60% for the mudarib
and 40% for rabb-ul-mal
. If there is a loss, the rabb-ul-mal
loses the invested capital, and the mudarib
loses the invested time and effort. The sharing of risk reflects the view of Islamic banking proponents that under Islam, the user of capital — labor
and management — should not bear all the risk of failure. Sharing of risk, according to proponents, results in a balanced distribution of income, and prevents financiers from dominating the economy.
Musharakah (joint venture)
is also a profit and loss sharing partnership, but one where investment comes from all the partners, all partners are given the option of participating in the management of the business, and all partners share in losses according to the ratio (pro rata
) of their investment.
may be "permanent" or "diminishing". It is often used in investment projects, letters of credit, and the purchase or real estate or property. Use of musharaka
is not great. In Malaysia, for example, [Note 16]
the share of musharaka
(or at least permanent musharaka
) financing declined from 1.4 percent in 2000 to 0.2 per cent in 2006
, (literally "diminishing partnership"), is a popular type of financing for major purchases such as housing. In it, the bank and purchaser (customer) have joint ownership of a purchased asset with the customer also leasing the asset.
As the customer gradually paying off the cost the bank's equity
share diminishes from all but the customer percentage of downpayment to nothing.
If the customer defaults and the asset is sold, the bank and the customer split the proceeds according to each party's current equity.
Asset-backed or debt-type instruments (also called contracts of exchange) are sales contracts that allow for the transfer of one commodity for another commodity, the transfer of a commodity for money, or the transfer of money for money.
They include Murabaha
, and Tawarruq
) is an Islamic contract for a sale where the buyer and seller agree on the markup
(profit) or "cost-plus
for the item(s) being sold.
In Islamic banking it has become a term for both a marked-up price and deferred payment — a way of financing a good (home, car, business supplies, etc.) whereby the bank buys the good and resells it to the customer at higher price (informing the customer of the price increase), and offering to take payment in installments or in a lump sum.
has also come to be "the most prevalent"
or "default" type of Islamic finance.
(One estimate is that 80% of Islamic lending is by Murabahah
This is despite the fact that (according to Uthmani) Islamic finance Shari‘ah supervisory boards "are unanimous" in agreement that Murabahah
loans "are not ideal modes of financing", and should be used only "when more preferable means of finance — "musharakah
— are not workable for some reasons".
differs from conventional finance (such as mortgages
for homes or hire purchase
/"installment plans" for furniture or appliances), in that the fixed return with which the bank is compensated is called "profit" and not interest,
and that the financier may not keep for itself any penalties for late payment. [Note 17]
Economists have questioned whether Murabahah
is "economically indistinguishable from traditional, debt- and interest-based finance." Since "there is principal and a payment plan, there is an implied interest rate",
based on conventional banking interest rates such as LIBOR
. Others complain that in practice most "murabaḥah
" transactions do not involve actual buying or selling of goods or commodities, but are merely cash-flows between banks, brokers and borrowers.
In Islamic jurisprudence (fiqh
, also called bai'-bithaman ajil
or BBA, is a credit sale or deferred payment sale, i.e. the sale of goods on a deferred payment basis. In Islamic finance, the bai' muajjal
product also involves the price markup of a murabahah
contract, and a murabahah
product involves a bai-muajjal
deferred payment. Thus the terms and are often used interchangeably, (according to Hans Visser),
or "in practice ... used together" (according to Faleel Jamaldeen).
However, according to another (Bangladeshi) source, Bai' muajjal
differs from Murabahah
in that the client, not the bank, is in possession of and bear the risk for the goods being purchased before completion of payment.
And according to a Malaysian source, the main difference between BBA (short for bai'-bithaman ajil) and murabaha
— at least as practiced in Malaysia — is that murabaha
is used for medium and short term financing and BBA for longer term.
as a finance product was introduced in 1983 by Bank Islam Malaysia Berhad.
Bai' al 'inah (sale and buy-back agreement)
Bai' al inah
(literally, "double sale"
or "a loan in the form of a sale"),
is a financing arrangement where the financier/bank buys some asset from the customer on spot
basis, with the financier's payment constituting the "loan". The asset is then sold back to the customer who pays in installments over time, essentially "repaying the loan". Since loaning of cash for profit is forbidden in Islamic Finance, some scholars do not believe Bai' al 'inah
is permissible in Islam. According to the Institute of Islamic Banking and Insurance, it "serves as a ruse for lending on interest",
but Bai' al inah
is practiced in Malaysia and similar jurisdictions.
(literally "bargaining") contract is used if the exact cost of the item(s) sold to the bank/financier either cannot be or is not ascertained. Musawamah
differs from Murabahah
in that the "seller is not under the obligation to reveal his cost or purchase price". Musawamah
is the "most common" type of "trading negotiation" seen in Islamic commerce.
Istisna and Bai Salam
(also Bia Istisna
or Bai' Al-Istisna
) and Bia Salam
(also Bai us salam
or just salam
) are "forward contracts
— customized contracts where immediate payment is made for goods in the future — goods not yet manufactured, built, or harvested. Istisna
contracts (literally, a request to manufacture something) are limited by Islamic fiqh to use for manufacturing, processing, or construction,
while salam "can be effected on anything"
— except gold, silver, or currencies based on these metals.
On the other hand, a salam contract cannot be cancelled unilaterally,
the full price must be paid in advance,
and the time of delivery must be specified
— restrictions that do not apply to istisna
In a istisna
contract, the financer/bank can makes payments in stages, to finance raw materials (in the case of manufacturing), or construction materials (in the case of the construction project).
When the product/structure is finished and sold, the bank can be repaid.
contracts should be as detailed as possible to avoid uncertainty. Salam
contracts predate istisna
and were designed to fulfill the needs of small farmers and traders.
Salam is a preferred financing structure and carries higher order of Shariah
compliance than contracts such as Murahabah
Examples of use of istisna
in the Islamic finance world include use by the Kuwait Finance House
and the Barzan gas project in Qatar.
Examples of banks using Salam
are ADCB Islamic Banking and Dubai Islamic Bank.
, (literally "to give something on rent")
is a leasing or renting contract.
In traditional Islamic jurisprudence (fiqh
), it means a contract for the hiring of persons, services, or the “usufruct
” of a property, generally for a fixed period and price.
In Islamic finance, al Ijarah
usually refers to a leasing contract that also includes a sales contract. Property such as plant, office automation, or motor vehicle, is leased to a client for stream of rental and purchase payments, so that the end of the leasing period coincides with completion of purchase payments and transfer of ownership to the lessee, and otherwise follows Islamic regulations.
There are several types of ijarah
in Islamic finance ("operating ijarah" or ijarah tashgheeliah
, are leases without sales and finance):
Ijarah thumma al bai' and Ijarah wa-iqtina
Ijarah thumma al bai`
and Ijarah wa-iqtina
("lease and ownership")
involve the leasing/renting/hiring of a good, paid in installments and ending with its purchase (or option to purchase) by/for the customer.
Both involve two contracts — a lease and a transfer of ownership of the asset or the property — that should be recorded in separate documents.
The two modes differ in that in Ijarah wa-iqtina
(or ijara muntahia bittamleek
) sale/ownership transfer is "an option given to the lessee" and cannot be a precondition.
In ijara thumma bay`
sale is part of the contract.
ijara mawsoofa bi al dhimma
In a "forward ijarah" or ijara mawsoofa bi al dhimma
Islamic contract, the service or benefit being leased is defined, rather than the particular unit providing that service/benefit.
In contemporary Islamic finance, it is used to finance construction (of a home, office, factory, etc.) combined with a Istisna
The party begins leasing the asset after "taking delivery" of it.
Among the complaints made against ijara
are that in practice some rules protecting the customer are overlooked,
that its rules provide weaker legal standing and consumer protection
and less flexibility
than conventional mortgage loan
or car finance
, as well as higher costs.
(literally "turns into silver",
contract/product where the client/customer can raise cash to be repaid later by buying and selling some readily saleable asset. An example of this would be a customer wishing to borrow $1000 in cash having their bank buy $1,100 worth of a commodity such as iron from a supplier, buying the iron from the bank on credit with 12 months to pay the $1100 back, immediately selling the metal back to the bank for $1000 cash to be paid on the spot. The bank resells the iron to the supplier. (This would be the equivalent of borrowing $1000 for a year at an interest rate of 11 per cent.)
Like Bai' al inah
mentioned above, the greater complexity of this transaction means more fees and higher costs than a conventional bank loan, but (in theory) compliance with shariah law because of the tangible assets that underlie the transactions . However, critics complain that "billions of dollars" of putative commodity-based tawarruq transactions have evaded the required commodity trades;
and Islamic scholars both contemporary[Note 18]
have forbidden the practice. Nonetheless, as of 2012 Islamic banks using Tawarruq
include the United Arab Bank, QNB Al Islamic, Standard Chartered
of United Arab Emirates, and Bank Muamalat Malaysia
Taqi Usmani insists that "role of loans" (as opposed to investment or finance) in a truly Islamic society is "very limited", and that Shariah law permits loans not as an ordinary occurrence, "but only in cases of dire need".
A shariah-compliant loan is known as Qardh-ul Hasan
, (also Qard Hasan
, literally: "benevolent loan" or "beneficence loan"). It is often described as an interest-free loan extended to needy people.
Such loans are often made by social service agencies, or by a firm as a benefit to its employees,
rather than by Islamic banks.
Quoting the Islamic prophet Muhammad, some sources insist that lenders may not gain "any advantage or benefits" from the loan, let alone interest.
However, some Islamic banks offer products called qardh-ul hasan
which charge lenders a management fee,
and others have savings account products called qardh-ul hasan,
(the "loan" being a deposit to a bank account) where the debtor (the bank) may pay an extra amount beyond the principal amount of the loan (known as a hibah
, literally gift) if the extra is not an obligation of the account/loan agreement.
Contracts of safety, security, service
These contracts are intended to help individual and business customers keep their funds safe.
, or Hundi
; literally "transfer" or "trust") is a widely used, informal "value transfer system"
for transferring funds from one geographical area to another, based not on wire transfers
but on a huge network of money brokers (known as "Hawaladars") throughout the Muslim world. Hawala
was not started as an halal
alternative to conventional banking transfers, since electronic wire transfers have not been found in violation of sharia,[Note 19]
has the advantage of being available in places wire transfer is not,
and predates conventional banking remittance
systems by many centuries.
In the first half of the 20th century it lost ground to instruments of the conventional banking system, but regained it starting in the late 20th century with the economic migration of Muslim workers to wealthier countries in the West and the Gulf and their need to send money home.
Dubai has traditionally served as a hub.
is based on a short term, discountable, negotiable, promissory note (or bill of exchange) called "Hundi",
transferred from one debtor to another. After the debt is transferred to the second debtor, the first debtor is free from his/her obligation.
Recipient of the funds often identify themselves with passwords given to them by the sender.
Hawaladars are often small traders who work at hawala
as a sideline or moonlighting operation.
Hawaladars networks are usually family or clan-based,
and enforcement of the contracts is based on these networks rather than the power of the state.
is called "surety" or "guaranty" in conventional finance. A third party accepts an existing obligation and becomes responsible for fulfilling someone’s liability.
(collateral or pledge contract) is property pledged against an obligation.
contract is made in order to secure a financial liability.
According to Mecelle
is "to make a property a security in respect of a right of claim, the payment in full of which from the property is permitted." Hadith tradition states that the Islamic prophet Muhammad purchased food grains on credit pledging his armor as rahn
In a Wakalah
contract, a person (the principal or muwakkel
) appoints a representative (the agent or wakil
) to undertake transactions on his/her behalf, that the principal does not have the time, knowledge or expertise to perform themselves — similar to a power of attorney
agreement in conventional legal terms. Wakalah should be a non-binding contract for a fixed fee. The agent's services may include selling and buying, lending and borrowing, debt assignment, guarantee, gifting, litigation and making payments, and are involved in numerous Islamic products like Musharakah
An example of wakalah
is found in a mudarabah
profit and loss sharing contract (above) where the mudarib
(the party that receives the capital and manages the enterprise) serves as a wakil
for the rabb-ul-mal
(the silent party that provides the capital) [Note 20]
Deposit side of Islamic banking
From the point of view of depositors, "Investment accounts" of Islamic banks — based on profit and loss sharing and asset-backed finance — play a similar role to the "time deposits
" of conventional banks. (For example, one Islamic bank — Al Rayan Bank
in the United Kingdom — talks about "Fixed Term" deposits or savings accounts).
In both, the depositor agrees to hold the deposit at the bank for a fixed amount of time.
In Islamic banking return is measured as "expected profit rate" rather than interest.
" of Islamic financial institutions, which provide no return, are structured with qard al-hasana
(also known as qard
, see above in Charitable lending
or less commonly as wadiah
contracts, according to Mohammad O. Farooq.
Restricted and unrestricted investment accounts
At least in one Muslim country with a strong Islamic banking sector (Malaysia), there are two main types of investment accounts offered by Islamic banks for those investing specifically in profit and loss sharing modes
— restricted or unrestricted.
- Restricted investment accounts (RIA) enable customers to specify the investment mandate and the underlying assets that their funds may be invested in,
- unrestricted investment accounts (UIAs) do not, leaving the bank or investing institution full authority to invest funds as "it deems fit", unrestricted by purpose, geography, or means of investing. In exchange the accounts may be "tailored to meet a diverse range of customer needs and preferences", but are not guaranteed against losses.
Some have complained that UIA accounts lack transparency, fail to follow Islamic banking standards, lack of customer representation on the board of governors,
and have sometimes hidden poor performance from investors.
Islamic banks also offer "demand deposits", i.e. accounts which promise the convenience of returning funds to depositors on demand, but in return usually pay little if any return on investment and/or charge more fees.[Note 21]
Because demand deposits pay little if any return and Qard al-hasana
) loans are forbidden to pay any "stipulated benefit", the Qard mode is a popular Islamic finance structure for demand deposits. In this design, customer deposits constitute "loans" and the Islamic bank a "borrower" who guarantees full return of the "lenders" deposits.
However, critics (M.O. Farooq,
Mohammad Hashim Kamali)
see conflicts between qard's roll in demand deposits and the dictates of traditional Islamic jurisprudence. Qard al-hasana
loans are intended to be acts of charity to the needy who are allowed lenient repayment.
Islamic banks, on the other hand, are multi-million or billion dollar profit-making institutions, and their depositor/lenders typically expect to be able to withdraw their deposits on demand rather than be asked to be lenient with the bank.
A further issue is that at least some conventional banks do pay a modest interest on their demand/savings deposits,
and Islamic banks often feel a need to compete with them, finding an (at least putative) shariah compliant technique to do so. The means that has been used is Hibah
in the form of prizes, exemptions, etc.,
which officially differ from the conventional banks' interest/riba
in not being legally stipulated or time bound.
Its use has nonetheless has been attacked by at least one scholar as "entry of riba
through the back door".
Wadiah and Amanah
Two other contracts sometimes used by Islamic finance institutions for pay-back-on-demand accounts instead of qard al-hasanah
(literally "trust"). Sources disagree over the definition of these two contracts. “Often the same words are used by different banks and have different meanings.”
are used interchangeably.
Sources differ over whether Wadiah
deposits are simply guaranteed by the bank
or must be kept unused with 100% reserve,
with another contract — called Wadia yadd ad daman
— allowing "rights of disposal" to invest but guaranteeing "repayment of the whole or part" of "current account deposit".
Sources also differ over whether banks can use Amanah
accounts for its operations — if it "obtains" the "authority" of depositor
— or not.
Sources do agree that the trustee of amanah
is not liable for "unforeseen mishap" (Abdullah and Chee),
"resulting from circumstances beyond its control",(financialislam.com),
or if there has not been a "breach of duty" (Reuters
According to at least one report, in practice no examples of 100 per cent reserve banking are known to exist.
Other Sharia-compliant financial instruments
Sukuk (Islamic bonds)
, (plural of صك Sakk) — often called "Islamic" or "sharia compliant" bonds — are financial certificates developed as an alternative to conventional bonds. Different types of sukuk are based on different structures of Islamic contracts mentioned above (murabaha
, etc.), depending on the project the sukuk
Like a conventional bond, a sukuk
has an expiration date. But instead of receiving interest payments on money lent as bonds do, a sukuk
holder is given "(nominal) part-ownership of an asset" from which they receive income "either from profits generated by that asset or from rental payments made by the issuer".
The part ownership element and (at least in theory) the lack of a guaranteed repayment of initial investment resembles equity
However, in practice, most sukuk
are "asset-based" rather than "asset-backed"—their assets are not truly owned by their Special Purpose Vehicle
, and (like conventional bonds), their holders have recourse to the originator if there is a shortfall in payments.
market began to take off around 2000 and as of 2013, sukuk
represent 0.25 percent of global bond markets.
The value of the total outstanding sukuk
as of the end of 2014 was $294 billion, with $188 billion from Asia, and $95.5 billion from the countries of the Gulf Cooperation Council
Demand for sukuk
should able to support further growth.
Takaful (Islamic insurance)
, sometimes called "Islamic insurance", differs from conventional insurance in that it is based on mutuality
so that the risk is borne by all the insured rather than by the insurance company.
Rather than paying premiums to a company, the insured contribute to a pooled fund overseen by a manager, and they receive any profits from the fund's investments.
Any surplus in the common pool of accumulated premiums should be redistributed to the insured. (As with all Islamic finance, funds must not be invested in haram
activities like interest-bearing instruments, enterprises involved in alcohol or pork.)
Like other Islamic finance operations, the takaful
industry has been praised by some for providing "superior alternatives" to conventional equivalents;
and criticized by others for not being significantly different from them in its use of the "law of large numbers
" to spread risk,
or its use of conventional corporate (not mutual) management practices.
The industry is projected to reach $25 billion in size by the end of 2017.
Islamic credit cards
While a number of scholars (Manzur Ahmad, Hossein Askari, Zamir Iqbal and Abbas Mirakhor) have cast doubt on the shariah compliance of any kind of credit card — or at least cards that "can offer the same service as the conventional credit card"
— there are credit cards claiming to be shariah-compliant (particularly in Malaysia, where as of about 2012 they were offered by Bank Islam Malaysia Berhad, CIMB Islamic Bank Berhad, HSBC Amanah Malaysia Berhad, Maybank Islamic Berhad, RHB Islamic Bank Berhad, Standard Chartered Berhad, Am Islamic Bank Berhad.
These generally following one of a number of arrangements:
- ujra (The client simply pays an annual service fee for using the card);
- ijara (Card is used as a leased asset. Ownership of whatever is purchased to card user after installments payments are complete.);
- kafala (The bank acts as a kafil (guarantor) for the transactions of the card holder. For its services, the card holder is obligated to pay kafala bi ujra (fee));
- qard ( The client acts as the borrower and the bank as a lender.);
- bai al-ina/wadiah (The bank sells the customer some item/commodity at a certain price and then shortly thereafter repurchases from the client at a lower price. The difference between the two prices is the income of the bank for its trouble administering the card. The customer's initial payment to the bank serves as the account balance for the credit card and ceiling limit of what can be spent. The bank's repayment to the customer constitutes whatever balance is left over after purchases.)
- cards that act much like debit cards, with any transaction "directly debited" from the holder's bank account.
Islamic funds are professionally managed investment funds that pool money from many investors to purchase securities that have been screened for sharia compliance. They include mutual funds holding equity
but also Islamic "alternative" funds deal in "anything from private equity and real estate to infrastructure and commodity asset classes."
They began growing fairly rapidly in about 2004,
and as of 2014 there were 943 Islamic mutual funds worldwide and as of May 2015, they held $53.2 billion of assets under management,
with "latent demand" for considerable growth.
For equity mutual funds, companies whose shares are being considered for purchase must be screened
- to exclude those that are involved in alcohol, tobacco, pork, adult entertainment industry, gambling, weapons, etc., but also
- those that are "engaged in prohibited speculative transactions (involving uncertainty or gambling), which are likely leveraged with debt", by examining the company's "financial ratios" to meet "certain financial benchmarks".
Creators of benchmarks to gauge the (equity) funds' performance include the Dow Jones Islamic market index series
and the FTSE Global Islamic Index Series.
At least from 2000 to 2009, Islamic equity funds under-performed both Islamic and conventional equity benchmarks, particularly as the 2007–08 financial crisis
set in (according to a study by Raphie Hayat and Roman Kraeuss).
As mentioned above (see Islamic laws on trading), "almost all conservative Sharia scholars" believe derivatives
(i.e. securities whose price is dependent upon one or more underlying assets) are in violation of Islamic prohibitions on gharar
This, however, has not stopped the Islamic finance industry from using some of these instruments, and derivative permissibility in Islam is a subject of "heated debate".
As of 2013 the Islamic derivatives market was "in its infancy" and its size was not known. Contracts or combinations of contracts for derivatives
include swaps and options:
Faleel Jamaldeen describes the Islamic swap market as being of two kinds of swaps:
- profit rate swap: "based on exchanging fixed for floating rate profits". (Similar to interest rate swaps of conventional finance. As of 2007, this kind of swap had the largest market of any variety of swaps.) According to Harris Irfan, the Islamic finance market is "awash" with "profit rate swap" contracts, including a global standard developed by the IIFM and International Swaps and Derivatives Association. In Malaysia, the "Islamic Profit Rate Swap" (IPRS) hedging tool is popular.
- cross-currency swap: These are used by investors to "transfer currency fluctuation risk among themselves."
Put and call options
The Islamic finance equivalent of a conventional call option[Note 24]
is known as an urbun
(lit. "down payment"), the equivalent of a put option
is known as a "reverse urbun
In each the seller has the right but not the obligation to either buy (in the case of a call or urbun
) or sell (in the case of a put or "reverse urbun
") at a pre-determined price by some point in the future. These two Islamic options also have a different name for a "premium", (called a "down-payment") and for the "strike price" ("preset price").
The options' Islamic distinctiveness has been questioned by analysts,
and its use has been criticized by conservative scholars.
seeks to help the poor and spur economic development by providing small loans to entrepreneurs too small and poor to interest non-microfinance banks. Its strategy meshes with the "guiding principles" or objectives of Islamic finance, and with the needs of Muslim-majority countries where a large fraction of the world's poor live,[Note 25]
many of them small entrepreneurs in need of capital, and most unwilling or unable to use formal financial services.
According to the Islamic Microfinance Network website (as of circa 2013),
there are more than 300 Islamic microfinance institutions in 32 countries,
The products used in Islamic microfinance may include some of those mentioned above — qard al hassan
, and others.
Unfortunately, a number of studies
have found "very few examples" of Microfinance institutions "operating in the field of Islamic finance" and few Islamic banks "involved in microfinance".
One 2012 report
found that Islamic microfinance made up less than 1 per cent of the global microfinance outreach, "despite the fact that almost half of the clients of microfinance live in Muslim countries and the demand for Islamic microfinance is very strong."