Finance: The value of Islamic finance is expected to surge

(AKI) - Islamic finance and banking is worth around 1 trillion dollars and is destined to grow more than 4 times the rate of conventional investing, according to analysts at Deloitte & Touche.

The international financial adviser expects the industry to surge 28.6 percent a year and have a value totalling 5 trillion dollars in 2016. By comparison, growth in conventional finance is forecast by Deloitte & Touche to grow 6.6 percent per year during the same period.

Other financial forecasts are more conservative. Credit Suisse expects Islamic finance to be worth 3 trillion dollars in 2016, while McKinsey Global Institute says growth depends on the price of oil.

Islamic finance should be worth 1.8 trillion dollars in 2020 if the average cost of oil is 30 dollars per barrel, according to McKinsey. Its worth would climb to 5 trillion dollars if a barrel of oil went for an average of 100 dollars, the company says.

The Islamic finance industry was not affected by the economic crisis nearly as much as conventional investing, thanks to the price price of oil.

Islamic investing refers to a system of financial activity consistent with the principles of Islamic or Sharia law.

It requires 'social responsibility' and a high level of transparency.

Sharia law forbids the payment of interest on loans, although it allows administration fees to be charged for financial services.

Investments in bonds, mortgages and derivatives are banned.