Activating the Role of Islamic Finance in the Development of Small and Medium Enterprises

Abstract

Islamic finance is one of the fastest growing segments of global financial industry. In some countries, it has become systemically important and, in many others, it is too big to be ignored. While it represents a small proportion of the global finance market (estimated at 1%-5% of global share), the Islamic finance industry has experienced double-digit rates of growth annually in recent years (estimated at 10%- 20% annual growth). Industry experts estimate that assets held under Islamic finance management doubled between 2007 and 2010 to reach around $1 trillion. This paper tries to note the main Principal of Islamic finance. In addition to discuss the Improvement can be made in several areas to promote and enhance the providing Islamic financial services. Islamic finance offer different instruments to satisfy providers and users of funds in a variety of ways: sales, trade financing, and investment. This paper aims to study the most important of the Islamic financial instruments that can be used to finance small and medium enterprises.