Islamic finance is a financial system that is based on principles of Shariah or Islamic law. It is a rapidly growing industry that is estimated to be worth over $3 trillion globally.
The Islamic finance industry is important in Japan for several reasons. First, Japan has a large and growing Muslim population, which creates a demand for Shariah-compliant financial products and services. Additionally, the Japanese government has recognized the potential for Islamic finance to tap into new markets and has taken steps to promote the growth of the industry in the country. Finally, the Islamic finance industry offers an alternative to traditional financial products and has the potential to attract a wider range of investors.
History of the Islamic Finance Industry in Japan
The Islamic finance industry in Japan has a relatively short history. Early efforts to promote the industry can be traced back to the 1980s when the Japanese government began to explore the possibility of issuing Sukuk (Islamic bonds). However, these efforts did not gain much traction at the time and it was not until the 21st century that the Islamic finance industry in Japan began to take off.
In recent years, the Japanese government has made significant efforts to support the growth of the Islamic finance industry. These efforts have included the establishment of regulatory frameworks and tax incentives to encourage the development of Islamic finance products and services. In 2020, the Japanese government took a major step forward in its efforts to promote the industry by launching the first Shariah-compliant real estate investment trust (REIT) in the country. This REIT is expected to pave the way for the development of other Islamic finance products such as takaful (Islamic insurance) and musharaka (joint venture financing). Read more>>