Islamic Finance, Growth and Investing

Islamic financeIslamic finance is one of the most rapidly growing segments of the global financial system. The emergence of Islamic financeIslamic finance can be traced back to 1963 in Egypt, while its importance comes to the global financial system only after the global financial crisis occurred in 2008. It has been reported that the continuing volatility in bond and equity markets, combined with the uncertaintyUncertainty surrounding the Euro Zone, has opened up the Islamic financeIslamic finance industry to a new segment of potential investors looking to diversify away from traditional investments. However, despite the increasing importance of Islamic financeIslamic finance , particularly in developing economies in the Middle East and Southeast Asia, religious and social complexity has acted against a holistic understanding by policymakers, researchers and practitioners. The study provides a review and analysis of the definition, principles, and instruments of Islamic financeIslamic finance that is provided by most Islamic banksIslamic banks . Also, the study tries to answer the question as to what are the key principles of Islamic financeIslamic finance , which led to economic growthEconomic growth . We find that the Islamic financeIslamic finance principles are conducive to the growthGrowth of the economy as they help in reducing inflation, monetary volatility, and unemployment, besides in achieving social justice and optimum allocation of resources.