Islamic banking and finance is not a recent phenomenon.
However, modern global Islamic finance is a recent development since it has now been accepted as a global commodity.
The Islamic banking and finance industry has now become part and parcel of the global financial system.
In its report, “The State of The Global Islamic Economy Report: Unlocking Opportunities 2022”, it reported the growth of the Islamic economy as $3.6 trillion in 2021, at a growth rate of 8.0% and is estimated to hit $4.9 trillion by 2025.
In a nutshell, the Islamic finance global system is growing at a compounded annual growth rate averaging 17% per annum.
The origin of contemporary Islamic banking can be traced to the establishment of the Mit-Gamr Islamic bank in Egypt, Africa in 1963.
In fact, until the early 1970s, the concept was just an academic exercise in the Universities of the Organization of Islamic Cooperation.
The development was followed by the establishment of the Dubai Islamic Bank in UAE in 1975 which ushered in the floodgate for other OIC countries to follow the example.
Today, there are at least 525 Islamic banks and over 1000 Islamic mutual funds across over 70 countries.
It is also important to note that the phenomenon has attracted mega international financial institutions such as the Federal Reserve of the USA, the FSA of England, the International Monetary Fund and the World Bank.
The widespread Islamic financial institutions do not exclude Western non-Islamic countries. For example, Freddie Mac and Fannie Mac in the USA have Islamic Home Finance products. Canada also has the Toronto Stock Exchange Shariah Index.
In 2010, the Islamic Financial Secretariat in the UK issued its first sovereign Sukuk (Islamic bond) in the country. In addition, the Financial Services Authority also in the UK approved the establishment of five banks in the country.
In 2013, the first Islamic economic forum was held in the UK, a non-Muslim nation for the first time in the history of Islamic banking and finance.
The list goes on and on. Even in Africa, the practice of Islamic finance is widespread, except in a few countries including Ghana.
To be continued.
The writer, Yahaya Iliasu Mustapha, is an Islamic Banking and Finance Patron and Advocate in Ghana.
Email: yahaya0246873726@gmail.com
Facebook account: facebook.com/Yahaya.iliasu.94