Islamic finance has gone through an exceptional growth period in recent years,the number of fully sharia'a compliant banks continuevto increase worldwide.Islamic finance is practiced in more than 72 countries and sharia'a financial product are not only offered by Islamic banks,but equally by conventional banks using specific distribution channels.The term 'conventional' is used to identify the financial institutions that have formed part of the financial institution for a long time and not specifically based on Islamic principles.

The object of an Islamic finance undertaking is not simply the pursuit of profit, but that the economic benefits of the enterprise should extend to goals such as social welfare and full employment. The ethical framework recognises that capital has a cost associated with it and is in favour of wealth generation. However, making money with money is deemed immoral in sharia, that wealth should be generated via trade or investments.

Financial transactions are strongly based on sharing of risks and reward between the provider of fund ( investor ) and the user of fund ( the entrepreneur). It is on the contrary that conventional banks aim to profit by accepting money deposits in return for the payment of interest and then lending money out in return for the payment of a higher level of interest. Islamic finance does not permit the use of interest (Riba) because it is deemed forbidden.

Islamic bank arranges their business in such a way that the bank's profitability is closely tied to that of the client,the bank stands to take profit or make loss in line with the project they are financing and as such must be more involved in the investment decision making.

Islamic finance offers situable sharia compliant financial services which are in form of contracts that are related to the conventional banks procedure but the means of operation differ. There is the partnership contract (Mudarabah) where one partner contributes the capital and the other partner, the skills and expertise,the investor (rab al mal) is not to interfere in the day to day activities but profits are shared accordingly.

There is another form of contract (Musharakah) where both parties contribute both capital and expertise,it is similar to venture capital in conventional banking. Murabaha contract is another form where you can offer deferred payment sale or installment credit sales for goods bought or sold,that is you buy today and pay later.

Ijara contract is the equivalent of lease,this contract gives room for another party ( lessee ) to use his asset against the payment of a rental fee, the difference with conventional lease is that the risk and reward during the period of lease is with the lessor. The last form of contract is the Sukuk which is related to bonds, in Islamic finance there must be an underlying tangible asset,the ownership of the asset is transferred to sukuk holders. It is shorter in the life span compared to conventional bond.

In Conclusion, Islamic finance aims at the growth of the economy and nation building with the view of a fairer and less vague business activities which should be embraced by the government.