Is Islamic Banking and Finance Doing Enough? Shaping the Sustainable and Socially Responsible Investment Community

Abstract

Islamic finance assets advanced at double-digit rates during the past decade, from about US$200 billion in 2003 to an estimated US$1.8 trillion at the end of 2013 (Ernst & Young 2014; IFSB 2014; Wyman 2009). Hence, despite this growth, Islamic finance and its related products are still focused in the Gulf Cooperation Council (GCC) countries, and Malaysia, and represent less than 1 percent of global financial assets. While, Islamic banking and finance sector, should responsive to small medium enterprises mitigating liability of smallness and newness. The factors mitigating the inherent liabilities associated with new entrepreneurial startups were found to be institutional support. Institutional support was also found to be an important factor of success for new startups. The primary focus of this study is to examine the critical role of Islamic Banking and Finance, expanding and facilitating entrepreneurial opportunities. This study draws on triple bottom line concept (people, planet and profit), by developing standards equivalent to triple bottom line reporting for Islamic banking and financial institutions, and disseminating independent and objective research to relevant stakeholders. This includes examining the potential positive or negative social impact of Islamic Banking and Finance on the financially sustainable and responsible community.