This is predicated on the principle that profits should be considered legitimate only upon the condition that they be generated from fully sharing in the business risk of an investment (the so called “profit and loss sharing principle”).
Islamic finance has witnessed a rapid expansion over the last decade, with annual growth rates of assets in the range of 10-15 per cent, and a wide dissemination across countries, beyond its traditional centers of gravity in the Middle East and South East Asia. The development of Islamic securities, notably the sukuks, has also contributed to increasing this sector’s activity in international capital markets.