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THE global market for Islamic finance at the end of last year was worth around $1.3 trillion,

The paper addresses various aspects of the globalization of Islamic finance, among others, the issue of the rise of Islamic banking in the West, Islamic jurisprudence and finance, global standards and integration of Islamic finance, and obstacles facing Islamic finance’s integration and growth into the global financial system. One central question asked in this paper is whether the globalization of Islamic finance as a system is even possible

the industry is starting to revive, with regulators in a far more central role. Microlenders are attracting capital again. Grameen Capital India, a social-investment bank, says $144m of equity has been injected into microfinance groups in the past 12 months, more than double the amount in the preceding year. The International Finance Corporation, a multilateral lender, invested $18m in Equitas, a mid-sized group in the southern state of Tamil Nadu. SKS, whose loan book is now worth just $325m, raised $47.5m by issuing shares last year.

Microlenders’ annual interest rates are now capped at 10-12 percentage points above their own borrowing costs, leaving most charging 23-27%.

microfinance firms are looking beyond small, unsecured loans, which the central bank caps at 50,000 rupees ($910) a pop. Equitas last year set up a subsidiary that sells mortgages to poorer customers. Bandhan has similar plans. P.N. Vasudevan, the managing director of Equitas, says his housing loans, starting at 100,000 rupees, involve lower operating costs, in part because mortgage payments often get transferred via banks and do not require collection.