The market for Islamic Banking is growing since several years with double digit growth rates. Several studies of the rating agency Standard & Poors and the consultancy Booz & Company evaluate combined assets of Islamic Banks to be nearly 500 billion US Dollars at the end of 2008. During the last 10 years, Islamic Banking has grown by 20% per year and there are no signs that the speed of growth will decrease – especially before the background of the current financial crisis, which hit conventional stock exchange indices like the US S&P and Dow Jones or the German DAX and the French CAC much harder than Islamic Indices like the Dow Jones Islamic Markets or the S&P 500 Shari’ah Index. The number of Shari’ah -compliant investment funds will have risen to more than 925 funds by end of 2009, according to Booz & Company, the volume of bonds issued amounts to more than 30 billion US Dollars each year. There is currently a volume of more than 80 billion Dollars waiting for placement in the market. In Islamic bonds and IPOs (Initial Public Offering, the floating of a company on the stock exchange), same as in Islamic retail products, the growth tendencies point northward.

The are two main drivers for his rapid growth: On the one hand, there is the growing demand for Islamic Finance products by Muslim (and also non Muslim) clients worldwide on the on hand. On the other hand, there is a growing amount of Islamic Banking products like accounts, funds, insurances and credits. Also, there is a growing amount of Islamic Banks in several countries that have started to compete with the existing conventional banks and also among themselves. The same holds true for Islamic insurances. In Malaysia and Saudi Arabia, there is already fierce competition among Islamic Banks themselves and between Islamic and conventional banks. As always, competition stimulates the business, delivers better products at a lower cost and thus increases customer demand. 

Several studies show that Muslim customers prefer Shari’ah-compliant banking products to conventional ones – as long as price and performance can compete. As nowadays most Islamic Finance products can easily compete with conventional products, as discussed above, and because Shari’ah conform investment have much better coped with the subprime crisis than their conventional pendants, the future signs for further growth of Islamic Finance look very promising.