Balancing Religion and Finance. Did Islamic Finance overcome possible difficulties that the Islamic law posed on conventional finance?

Bachelor Thesis from the year 2016 in the subject Economics - History grade: 13 University of Mannheim (Fakultät der Rechtswissenschaften und VWL) language: English abstract: Since the mid-1970s an industry growing at considerable pace in the Islamic world is gaining market shares all over the world in countries with sufficient Muslim populations. This Islamic Finance industry claims to act in line with the ethical and practical principles set forth in the Qu'ran and the Shari'ah thus appealing to Muslim and non-Muslim clients alike who search for viable alternatives to conventional financial products. As explained the first beginnings of this phenomenon can be traced well back into the 1970s when the first Islamic Banks started operating in Egypt and Jordan. In the past decades a vast amount of research has been published - empirical and theoretical - to review the impacts of Islamic Finance on the financial markets of the Islamic world. These works to a great deal inspired by the enormous need of the industry for quantitative and qualitative research all dealt with questions of comparative efficiency of conventional and Islamic Finance the demand for Shari'ah-compliant financial products the actual genuineness or authenticity of the industry etc. However only a very small portion of these research works dealt with the question whether or not the Islamic world actually needs Islamic Finance. At first this might seem as a trivial question (if there was no need for Islamic Finance there would not have been this substantial growth). But at second thought one realizes the associations that come which come with the question of raison d'être: Why did Islamic Finance emerge? Does it add an economic value to its markets? And most importantly is it - so far - successfully reaching its goals? To my understanding the works that deal with this big-picture analysis are thin on the ground. Therefore this work shall take a first step at putting Isl