Case Study of the Role of the Islamic Sector in Increasing Access to Financial Services: the United Kingdom

The United Kingdom has the most highly developed Islamic financial services industry of any Muslim minority country. Its development has been actively supported by successive governments, from a variety of motives. This paper will summarise the development of the Islamic financial sector in the UK and then consider its present state and some of the issues and problems which have become apparent with it, with particular but not exclusive reference to home purchase finance. The two stated aims of the British authorities in their encouragement of Islamic finance were to attract investment into the country from Muslim majority countries, notably the oil states, and to make it easier for British Muslims to access financial services which are in accordance with their faith. It was hoped that this would increase the financial inclusion of impoverished Muslim communities and thus improve their overall economic position. There are some contradictions between helping the local Muslim population