Recent studies revealed at a Muslim retail bank conference in the UAE on Monday have shown that in the coming decade, non-Muslim banks might lose some 30 to 40 percent of their Muslim customers to Islamic banks or to those that conform to Islamic law regulations.
Between the years 2001 and 2004, deposits in Islamic banks in the UAE grew to $4.76 billion, reflecting an increase of nearly 30 percent per annum. Such deposits grew almost twice as fast as those in regular retail banks, which rose by 15 during the same period, according to <i>Gulf News</i>.
The repercussions of such a trend could have great influence, considering the fact that the worldwide Muslim population stands at over a billion.
Saleh Lootah, a board member at Dubai Islamic Bank, stated at the conference on Monday that, "With over a billion Muslims worldwide, the potential for retail Islamic finance is clearly very significant."
According to Lootah, small businesses will also turn away from non-Muslim finance as Muslim finance options become available at competitive prices.
Several top British banks have already designed commercial mortgage equivalents for use by Muslims.
Growing acceptance of Islamic trade in the UAE led to an increase of 14 percent of Islamic banks' share of retail deposits in all the UAE at the end of 2004, up from 10 percent three years earlier. Their share of retail credit rose from nine per cent in 2001 to 11 per cent at the end of 2004.
Yavar Moini, senior manager at Dubai Bank, expects Islamic retail deposits to continue grow by 29 percent annually in the coming four years, with retail credit increasing some 16 percent annually.