Alternative system lures adherents

Interest in non-Western methods of finance is spreading and embracing a growing range of products and services. Muslims seeking to live by their Islamic principles must reconcile themselves to the difficulties of living in a world where the practice of setting a predetermined interest rate is central to borrowing and lending money. The total deposits of today's over 160 Islamic financial institutions are well over $100 billion and have a projected growth rate of 10% each year. Interest in Islamic finance has been encouraged by the devlopment of Islamic equity indexes and the attention of western banks to Islamic finance. Current problems facing Islamic banks include those dealing with the fragile economies of many of the poorer Muslim countries, the risk of collapse, higher oil prices, and disagreement between scholars on acceptable and unacceptable financial instruments. Islamic bankers continue to say, however, that the Islamic financial system makes more efficient use of capit