The Islamic world is on the brink of launching a money market. The two main centres for the proposed market are the island Gulf state of Bahrain and Labuan, Malaysia's off-shore financial centre in the South China Sea. The launch is in October, and the subscriptions have not yet been made.
Under Sharia, or Islamic law, Muslims may only enter into financial transactions that are free of interest. There are varying interpretations of what is an acceptable financial instrument, but it is thought that the new market will straddle the gap between secular finance and religious beliefs in an ethical way, providing Muslim investors with a strong regulatory mechanism to protect their funds.
Zaki Badawi, principal of the Muslim College in west London and leading Sharia adviser to several top investment banks, said: "Second and third-generation Muslims in the West no longer send their earnings back home. This generation identifies with the West's approach to money. They want to expand their businesses, educate their children privately and put a bit aside for their retirement."
"Money cannot be used to make money," said Mushtaq Parker, a writer and journalist-editor of Islamic Banker , a monthly magazine and market reference. "Money must be used productively. Risk and reward have to be shared.
"The size of the Islamic global banking sector - that is, funds under management - is estimated at $150 billion to $200 billion and is forecast to grow at 15 to 20 per cent per annum over the next few years.
"The figures indicate that faith-based investment and financial management have carved a niche for themselves. The most advanced in terms of products and concept is the Islamic system.
"In Islamic banking, you have a whole string of contracts or instruments, and they are engineering more financial products, both in retail banking and in leasing, hire purchase and project finance. These cover the whole spectrum.
"Over the past 12 months, a number of online Islamic financial services portals have been launched to offer retail personal financial services such as ISAs and pensions and insurance and equities to those concerned with ethical products - not only Muslims."