Book Review: Islamic Banking – A $300 Billion Deception

Islamic Banking – A $300 Billion Deception: Observations and Arguments on Riba (interest or usury), Islamic Banking Practices, Venture Capital and Enlightenment. arrived shorter than I expected at around 60 pages, and was probably longer than it needed to be. The author outlines his major points early on and supplements them with some interesting real-world examples throughout the work. Unfortunately, he also repeats many of the key messages more times than is necessary.

Typos and grammatical errors are widespread. Seriously, get a decent editor and proofreader.

A key message from the book is that lending is not risk-free as some proponents of Islamic finance purport. Restricting interest-based lending means many transactions simply won’t take place. Somehow, the author misses the extension of this message when he recommends a cap on interest charged to prevent usury – nowhere does he consider that this will similarly restrict lending to high risk borrowers since at times higher interest rates are required to reflect the risk.

Overall, a good read, most importantly for those who have not yet understood the flaws of the adolescent Islamic finance industry

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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