Turning the Prophet's profits

Islamic banks, though their collective assets are currently only $25 to $100 billion, are growing quickly. The potential market for these firms is as vast as the Muslim population -- about one billion. Since shari`a bans interest, Islamic banks adopt practices like murabaha (cost-plus financing). Two problems now challenge Islamic banks. First, scholars on a bank's shari`a board often disagree. Second, Muslim investors want easy access to savings, forcing Islamic banks to invest in equities; these equities involve increased risk. Though most potentially invested-in firms pay interest when borrowing from other sources, shari`a boards have allowed investment on the condition that these companies borrow modest amounts. Some Islamic equity funds also use a proportion of a company's interest income for charity.