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The Dallah Albaraka Group, founded by Sheikh Saleh Kamel in 1969, is presently spreading into the South African market. The group invests in over 85 companies and employs around 50,000 individuals. Albaraka has in its operations set up a system of financial institutions. Albaraka started a Durban joint venture in 1990, and since then has expanded to Cape Town and to Pretoria. In South Africa, an Albaraka bank executive explains, the Islamic bank is able to act in ways such firms cannot operate elsewhere. One illustration of this fact is that there are no deposit guarantees in South Africa.

Of the conventional banks involved in Islamic finance deals, Citibank is amongst the top. The bank has a Bahrain office. Mohammed E. Al-Shroogi, regional Citibank manager in Bahrain, sees the resurgence of religion in the Islamic world as factor in the growth of the Islamic finance field. He sees the increase in the religious spirit and in the number of youth of the

Aluminum Bahrain (Alba) has undertaken a $32.5 million financing deal arranged with Gulf International Bank and sponsored by the Al Rajhi Banking and Investment Corporation. The funds are intended for a fume treatment plant. The plant is being built as a component of an Alba environmentalist effort. The deal is in the istisna' format. The actual construction of the plant is undertaken by a Norwegian firm ABB Environmental Norsk Viftefabrik. Al Rajhi will first buy the plant from ABB and then sell it to Alba over a six year period.

Islamic financial corporations now compete with conventional ones for aircraft leasing deals. The three airlines that have utilized Islamic finance thus far are Kuwait Airways Corporation, Emirates, and Pakistan International Airlines. One year ago, Kuwait Airways Corporation sealed a $464 million deal with Kuwait's International Investor. The transaction has been seen as an unprecedented one in the scale of its ambition. The airline has the option to buy seven airbuses following nine years of payments. The payments will cover 90% of the cost of the planes.

The quick growth of Islamic funds is perhaps explained by the necessity of investment in

Principal terms of Islamic finance are: 1. Ijara , which is a leasing deal; 2. Istisna , which is a pre-production arrangement by which a bank provides raw materials to a firm that repays the funds with returns from the project; 3. Mahafez , which are cooperative communities; 4.

Islamic investors, it is explained, seek both a 'spiritual return' and an adequate financial return on the funds they put forth. Conventional banks come up short in the spiritual category. Islamic economic activity needs to be grounded in the idea of justice that is found in al-

While the practice of Islamic banking is a recently-started occurrence in the West, it is today a growing phenomenon in Europe. A number of Islamic institutions have been set up in the past few years. The two principal differences between Islamic banks and conventional banks are that: 1. Islamic banks do not deal with interest; and 2. Risks are borne on the shoulders of both the bank and the business invested in. Islamic banks treat their depositors like partners, while conventional banks do not. In losing ventures, entrepreneurs who give no capital lose only their time.

The Islamic banking industry, as a niche market, is a growing field. The pool of funds in Islamic institutions' hands is figured to be between $50 and $100 billion. There is a great deal of geographic diversity amongst these firms. Citibank now has over $1 billion in Islamic funds, and the firm is set to establish an Islamic subsidiary in Bahrain to be called Citi Islamic Investment Bank. ANO-Amro Holding NV, a Dutch firm, is initiating a four-person team to work on Islamic banking. There are a number of problems that stand in the way of worldwide Islamic banking expansion.

While Islamic banking has been practiced for a number of years, only in the past ten years has the sector been a prominent one. At the core of Islamic banking is the idea that interest may not be dealt with. It has been suggested that the funds in the Islamic banking sphere are now over $60 billion. One expectation is that the statistic will be over $100 billion by 1997. The sector's annual growth rate has been stated to be at an average of 15%. The system entails a great deal beyond the ban on interest.