{"id":3802,"date":"2021-11-12T03:28:33","date_gmt":"2021-11-12T03:28:33","guid":{"rendered":"https:\/\/blog.ethis.co\/?p=3802"},"modified":"2022-11-15T04:05:18","modified_gmt":"2022-11-15T04:05:18","slug":"islamic-finance-market-success-models","status":"publish","type":"post","link":"https:\/\/ethis.co\/blog\/islamic-finance-market-success-models\/","title":{"rendered":"Potential Models of Success in Countries Without a Developed Islamic Finance market"},"content":{"rendered":"\n

By Zainab Ahsan<\/em><\/strong><\/p>\n\n\n\n

The presence or absence of a particular market in a given jurisdiction greatly determines the tendency to invest resources into it. <\/p>\n\n\n\n

Emerging markets, specifically those without a developed Islamic Finance<\/a> market, on the one hand, offer the potential opportunity to leverage the first-mover advantage when it comes to the introduction and scalability of new services and products. But, on the other hand, they present the challenge of \u2018institutional voids’ or \u2014the absence of specialised intermediaries, regulatory systems, and contract-enforcing mechanisms, which disincentive foreign investments. <\/p>\n\n\n\n

While this may not cause tangible losses to an already burgeoning industry, it does lead to the exclusion of entire markets out of the ecosystem.<\/p>\n\n\n\n

However, the technological revolution has led to the increasing digitisation of services, in addition to global competitiveness, the time is ripe to experiment with new classes of products and services that may navigate the aforementioned challenges creatively, thereby bringing excluded user groups into the fold of the ecosystem i.e. through both remotely managed and locally incentivised services. <\/p>\n\n\n\n

In practice, an Islamic Finance product can be developed to serve many purposes\u2014not only to satisfy social justice demands. However, no matter the motivation for creating a product (such as to meet market demand), every Islamic financial product must exist under the framework of sharia law.<\/p>\n\n\n\n

Islamic finance is steadily making its mark across the world\u2014not only in regions with predominantly Muslim populations but also in the Western countries such as the United Kingdom, France and Germany where a sizeable expatriate Muslim population resides and is increasingly keen to avail Shariah-compliant investment and financing facilities. Asset growth has been particularly pronounced in the GCC countries.<\/p>\n\n\n\n

\n
\n

Table of Contents<\/p>\n