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The Young World of Islamic Finance Essay

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The world of Islamic Finance is still young and it was begins only a few decades ago. Although it is new, the Islamic Finance is rapidly develop and continues to expand to serve a growing population of Muslim. Many have been able to accept the Islamic financial system and even admiration of Islamic finance is increasing due to the uniqueness found in the Islamic financial system. The definition of Islamic finance is the system in finance that operates it activities based on Islamic law (which is called Sharia) and is therefore Sharia compliant. All Islamic financial activities is free from interest (riba) and it is based on profit sharing activities.
In 6th century, the core concepts of Islamic finance date back to the birth of Islam. Version of Islamic finance is freely practice for a few decades before Islamic empire declined and colonized by the European nations. In 1970s the Islamic finance was emerged in large part due to the effort of Muslim economists who envisioned alternatives to conventional western economics in the 20th century.
There are several events that occurred in the history of Islamic financial industry and it was started at the year of 1963 when the Mit Ghamr Saving Bank located at Egypt was opened and it becoming the first modern Islamic Bank. At the same year in Malaysia, the Pilgrims Saving Corporation was established and although it is not a bank, it began to incorporate basic Islamic banking concepts. By the year of 1975, The Islamic Development Bank was opened in Saudi Arabia and bring the Islamic Finance industry at an international presence. It recruited member countries and it offered them financial products in order to promote economic and community development.
In 1979, the first Isla...


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...of the community is small but it still develops. Several ways can we do to make sure that the awareness of our community toward Islamic Finance will be increase is through the campaign by Bank Islam to expose all the Islamic banking products and services. Moreover, Ministry of Education should set the Islamic finance course is the compulsory subject in the education system in our country.
Last but not least, we must ensure that Islamic finance continues to be develop and get the stronger position in finance industry. In the future, if we use all the financial and banking system in the ways of Islam will be a good step in order to strengthen Islamic finance in our country. Our country should reduce in the use of conventional finance so that the use will be reduced and the Islamic finance will be the only one financial institution that operate in this country.



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