There were many lessons to be learned from the recent global financial crisis, which could help banks and other financial institutions to safeguard themselves against similar hazards in the future. This includes looking towards areas of finance that did not suffer so greatly from the recession, due to their unique way of doing things - particularly Islamic finance.

There are many inherent principles of Islamic finance that can make it appealing to investors and borrowers alike. One is its effective avoidance of making bad investments in overly leveraged firms, as such risky investments are not permitted by Shariah values. This can make Islamic finance a less risky and much more stable method of banking that is better able to withstand a financial crisis, meaning its appeal goes beyond the Islamic world to non-Muslims too.

Islamic finance views risky investments as a form of gambling, which is forbidden by Shariah teachings. Although some investors and traders who are accustomed to market risks may find this approach restrictive, this can also be a clear advantage in terms of the security of your investments, as there can be a reduced likelihood of losing money.

Although Islamic finance is still a comparatively young method of banking, and one that isn't without its problems, this area of finance continues to demonstrate phenomenal growth and resilience, as even more people see its unique benefits. In a world where many people feel distrustful towards banks, an alternative financial approach that creates a closer and more tangible link between financial and economic activity, and does not allow risks to escalate out of control, can be particularly appealing.

The interest-free approach of Islamic finance also makes it appealing to borrowers, who will not find themselves penalised for borrowing money when they need it by paying back exorbitant interest rates. Some people are also attracted to Islamic finance precisely for this moral and ethical nature, especially those who may hold negative views of Western financial institutions that charge interest and may put their assets at risk.

There are also no barriers to entry for non-Muslims to Islamic finance, as its names does not suggest any affiliations of belief, nationality, ethnicity or class, but simply refers to its guiding principles. Non-Muslims living in many Western countries will be increasingly able to find Islamic finance options available either from their current bank or from dedicated Islamic banks expanding into the area, offering a greater degree of choice when making financial decisions.

The author of this article is a part of a digital blogging team who work with brands like Fidomes. The content contained in this article is for information purposes only and should not be used to make any financial decisions.