Quora Answer: Why Do People Find Islamic Finance Attractive?
بِسۡمِ ٱللهِ ٱلرَّحۡمَـٰنِ ٱلرَّحِيمِ
The following is my answer to a Quora question: “Why do people find Islamic finance attractive?”
It is an overstatement that people find Islamic finance attractive. Islamic finance is projected to grow to around US$2.05 trillion by the end of 2019. This is after two years of stagnation. The global financial markets is estimated at US$80 trillion with a 6% growth for most of those years. This means that even as the Islamic financial market grows every few years, growth in global finance itself outstrips it by a lot. At that rate, Islamic finance is actually losing market share. It is a niche system for a niche market.
The people who do find Islamic finance attractive generally come from the segment of the Muslim population that falls for the so-called “Islamic” branding, and its promise of no riba’, usury, which is not the reality. As long as banks are leveraged and lend more than they hold, all their manipulation of individual financial products is irrelevant. It is still built on a foundation of riba’. There are Islamic finance evangelists who push this nonsense that Islamic finance is shari’ah-compliant, when all they are doing is making it up as they go along. They have created products that are more expensive for the consumer, have lower yields, and is unable to give a better return on investment. People find it attractive because they are gullible, or because they have inklings of piety without knowledge, or they are invested in it as “experts”.