Now brewing: Islamic finance and takaful in China

By  Jeffrey Kirk

Abstract

We may be witnessing the seeds of a possible lasting recovery to the global recession. This development presents unique opportunities and challenges to market players; opportunities as to the expansion of finance products and services and challenges in identifying future trends, most profitable sectors and the most effective deployment of capital and expertise. A financial sector which demands attention due to its growth and continuing appeal is Islamic finance. At present, there are more than 300 Islamic banking institutions and over 250 Shariah-compliant funds operating in over 50 countries. The number of such institutions and investment vehicles and the assets held and managed by them are continuing to grow on an almost daily basis. Assets invested in Islamic law-compliant structures are currently (conservatively) estimated as exceeding US$1 trillion globally. This figure is expected to rise, particularly in light of factors such as the recovery from the lingering effects of the global financial crisis, the increase in the flow of petro- dollars and the growth in the GDP of economies in Asia and Africa that have a healthy and expanding appetite for Islamic finance products and services. Indonesia and Malaysia are examples of such states, where GDP expanded by 6.1% and 2.9%, respectively, in the fourth quarter of 2012 over the previous quarter.