São Paulo – Investments made according to the Islamic tradition are growing in volume and becoming more important in Arab and Muslim countries. A study by the International Monetary Fund (IMF) shows that the participation share of Islamic finances is still small in comparison with the world total, however, is growing. The document names, for instance, a research by consulting company Ernst & Young that reveals that Islamic assets grew in “double digit rates” in one decade and went from a total of US$ 200 billion in 2003 to US$ 1.8 trillion in 2013. <\/p>\n
Bank operations under the Islamic law amount to 15% of the banking system in Arab countries such as Kuwait, Qatar, Saudi Arabia, Sudan, Yemen and United Arab Emirates, and non-Arabs, such as Malaysia, Bangladesh, Brunei and Iran. In Iran and Sudan, says the document, it’s the Islamic rules that determine the operation of the banking system. <\/p>\n
Islamic finances prohibits, for instance, financial speculation and don’t allow a bank or a project funder to be paid through interest rate payments. Money contribution to bets, activities considered illegal, or in deals surrounded by too much uncertainties are also prohibited. One of the forms of investment is through bonds, the sukuks, which amount to 15% of the total dealt. <\/p>\n
In some business, the funder is paid through a share in the profits resulted from the loan. That is, if a person loans money for the construction of a commercial building, this person can be paid through the revenues that this building will generate. <\/p>\n
The study says that the Islamic finances are less prone to crisis because, through them, the investor is less exposed to debts, because they prohibit speculation and are based on asset-based financing, that is, product, companies and investments must generate a profit in the medium or long-term. On the other hand, says the study, in the majority of the countries the Islamic finances are regulated by bodies that operate based on rules of traditional finances, with a lack of norms to regulate their operations. Besides, there is not yet a scale economy. <\/p>\n
The study says that only 1.25% of the total bank assets follow the investments determined by Islamism. Still according to the study, Islamic finances are concentrated in the countries of the Gulf, such as Saudi Arabia, Kuwait, United Arab Emirates, Oman, Bahrain and Qatar, in Iran and Malaysia. <\/p>\n
In Saudi Arabia, Brunei and Kuwait, the market share of the Islamic finance-based operations go over 60%, and in Yemen they stand at over 40%. Besides sukuks, some other business done under Islamic finances are investment funds, insurances, leasing and microfinance. The study attributes the strong growth of Islamic finances to the expansion of Islamic populations and to the fact that some economies that follow these rules displayed strong growth themselves in the last few years. <\/p>\n
*Translated by Sérgio Kakitani<\/strong><\/p>\n