Islamic financial institutions and their contribution to trade and development

Author

Ahmad, Zayadine

Source

International Economic Relations from Islamic Perspectives

Publisher

Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)

Publication Date

1992-12-31

Country of Publication

Saudi Arabia

No. of Pages

20

Main Subjects

Financial and Accounting Sciences
Islamic Studies

English Abstract

The continuous increase in the number of Islamic banks, their impressive record in deposit mobilization, the smooth transition from an interest based to interest free banking system in Pakistan and Iran have show that an Islamic alternative to conventional banking is fully viable.

However, the Islamic finance movement is still in its infancy.

Till such time that Islamic banking becomes the dominant system of banking in the Islamic countries, conventional banking and Islamic banking, both will have a role to play in the economic growth of those countries.

Islamic banks have used their funds largely in financing local and foreign trade.

because of the high degree of dependence of most Islamic countries on foreign trade, Islamic banks serve an essential need of these countries by making foreign trade financing available.

Foreign trade financing has the potential of assisting the process of development even more if it helps in promoting specialization in production of goods in line with the comparative advantage of different countries in various fields of production.

However, Islamic banks need to go for direct financing of agriculture and industry in order to accelerate the process of economic growth in the Islamic countries.

(Editors)].

Language

English

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Data Type

Book chapters

Notes

Includes in-text citations at the end of the paper.

Record ID

BIM-778252