World Bank signs cooperation deal to promote development of Islamic finance

Islamic finance can be an effective tool for financing development, in both Muslim and non-Muslim countries, CIBAFI said.

The two organisations will cooperate in generating and disseminating information about Islamic finance, encouraging research and promoting awareness, CIBAFI said.

Abayomi Alawode, head of Islamic finance at the World Bank, said: "This signing underscores the World Bank’s commitment to the development of the Islamic financial services industry. As the industry expands, it will inevitably impact the way global finance evolves to support real sector economic activity and contribute to addressing the challenges of ending extreme poverty and boosting shared prosperity."

"We look forward to working closely with CIBAFI to strengthen the institutional foundations of Islamic finance, enhance regulatory and supervisory frameworks, and share sound practices and lessons of experience in the industry, including sound practices relating to business practices, risk management and market development," he said.

Reports this week said that the global sukuk or Islamic bond market is likely to halve this year, as a major issuer has pulled out.

Earlier this year, however, reports said that Islamic banking and finance could exceed $2.5 trillion of assets in 2015 as the industry extended its reach into new international markets.

In January, Muhammad Zubair Mughal, chief executive of Dubai-based AlHuda Centre of Islamic Banking and Economics (CIBE) said that there are more than 1,500 organisations working for Islamic banking, finance, takaful, sukuk, Islamic funds and micro-finance in more than 90 countries, some 40% of which are non-Muslim nations. He said Muslim countries, which have a 76% share of the global Islamic banking market, include Qatar, Saudi Arabia, the United Arab Emirates, Malaysia, Pakistan and Indonesia.