Islamic Banking Is Not For the Muslims Alone - Essay Example

As a result of the strict lending rules, Islamic Banking is gaining popularity among Muslims and non-Muslims globally at a high rate. Although referred to as Islamic Banking, non-Muslims have currently been included in the system. Some observers have defined it as a sophisticated banking and finance structure that takes into consideration moral and social values, highly compatible with the modern financial needs, which make the bank, receive overwhelming support from all people. The incorporation of strict sharia economics and modern lending economics have been the major contributing factors for non-Muslims’ indulgence in the Islamic banking system (Syed, 2012).

Previously, Islamic Banking was attractive only to a limited number of Muslims whose main purpose was to avoid interest charged by the conventional banking system. However, the increased support it has received from the rich Gulf Muslim investors has increased its popularity, luring more people into the system. The rising demand for ethical investing and the need for less risky alternatives of investing have pulled more numbers of non-Muslims into Islamic Banking. Additionally, the Islamic finance sector is yet to develop into a fully-fledged financial sector. Therefore, more people are required to chip in their little share so as to expand the market share. Driven by the vision of offering an alternative banking system to conventional banking, designers of Islamic Banking allowed non-Muslims to take part in order to accelerate its growth (Abdullah, 2012).

The high potential shown by Islamic Banking has seen the introduction of classes based on the ideals of the Islamic Banking system (Khan, 2013). In fact, some of these institutions have greatly advocated for Islamic Banking to the extent of recommending it among their students. Harvard for example has set up an Islamic Finance Project since 1994 that is based on Islamic Banking. Other constitutions have adopted the studies, with governments full in support of the idea by funding the projects to promote their growth.

Countries have developed robust infrastructure of Islamic Banking and finance systems that are in line with Islamic Banking to boost its development and growth. Luxembourg, Bahrain, and Malaysia are examples of countries that have heavily invested in Islamic Banking and have registered numerous benefits from it. Malaysia is a highly Muslim-dominated country that has the highest numbers of non-Muslim account holders totaling up to 409% of the total account holders in the Muslim Banks. The economic benefits of Muslim Banking have prompted these countries to seek measures of ensuring that they become lending centres for Islamic banking and finance.

Abdullah (2012) points out that recent trends have shown that while the world has severely been hit by an economic crisis, Islamic Banks kept thriving and showing continuous growth. This put the little-known sector on the world map, increasingly pulling in more people, both Muslims, and non-Muslims. The confidence portrayed by the sector has seen more people join Islamic Banking as it increasingly takes part in the world economy.

Islamic Banking was developed with the aim of promoting Muslim financial growth by instilling Sharia principles in the running of the operations. However, various factors as discussed above have led to the inclusion of non-Muslims in the industry, making it an all-rounded industry that includes people from other religious backgrounds.