Global Islamic Finance: Principles and Products

The Islamic financial system is part of the modern economy and it is established on the religious beliefs that emerged in some Muslim countries. In the last years, numerous studies have noted the expansion and growing importance of Islamic Finance across many parts of the world. Islamic finance has developed over a long period of a profound rethinking of the cultural, religious and social identity of Muslims and with the affirmation of its distinctive characteristics. In 1975, the establishment of the Islamic Development Bank in Saudi Arabia represented the first involvement of institutions and governments in the development of Islamic finance. This chapter examines the geography of Islamic Finance and the main drivers of its expansion. It discusses the main principles and pillars of the Islamic Economic Model and its main instrument.