is a financial Web site, but its home page is a virtual bazaar.




 Surfers can check prayer times, plan pilgrimages to Mecca or “Ask the Scholars” about how to handle finances under Sharia, the religious law, which shuns profit from interest payments or “sins” like alcohol and pornography. “I have daily nightmares that Allah will punish me in the hereafter for working in an interest-based industry,” wrote one worried banker. The scholar’s advice: leave the bank as soon as possible, for interest is not halal, or permissible.

IslamiQ hopes to broaden what is possible for Muslim investors, within the bounds of what is halal. The seventh-century Qur’anic strictures against unjust enrichment have discouraged stock speculation and forbidden Muslims to reap interest. That put Western-style banking pretty much off limits for hundreds of millions of observant yet moneyed Muslims around the world. They were left to invest in real estate, trade financing or small business–and to accumulate a pool of cash that IslamiQ now estimates at $150 billion, and growing by 30 percent a year. “There’s a lot of money that’s been sitting under people’s mattresses,” says IslamiQ CEO and cofounder Hasnita Hashim, a 38-year-old Malaysian banker. “If we can increase interest in investing across the Islamic world, we can mobilize money that hasn’t been used.”

It’s happening. The first modern Islamic banks opened in the ’60s, offering dividends and “profit sharing” rather than interest. A few Western financial institutions such as Citibank started serving the Islamic market in the late 1970s. Today there are about 75 Islamic equity funds worldwide–most under five years old, based in Muslim countries and targeted at institutional investors and millionaires in the oil-rich Middle East. Now the growth of the Islamic middle class is driving the advent of a “new economic order in the Muslim world,” says Virginia-based Islamic scholar and fund adviser Yusuf Talal DeLorenzo.

Last year Dow Jones unveiled the first global stock benchmark for Islamically conscientious investors. The Islamic Market Index follows 660 Sharia-compliant companies in 34 countries, including Microsoft, Coca-Cola and BP Amoco. Brown Brothers Harriman & Co. and a dozen other banks are introducing funds tracking the index. Barclays of Britain and Commerzbank AG in Germany are nurturing new portfolios for Muslims. In November, FTSE International in London introduced its own Islamic indexes. “Investors kept saying, ‘It’s a niche market’,” says Hashim in her Oxford-polished English. “Well, it’s a niche of about 1.3 billion people!”

Hashim aims to make the niche her own. will have offices in New York, London–a center for Muslim banking since the late ’70s–and Malaysia, a Muslim country whose strong middle class helped produce some recent innovations in Islamic finance. Hashim has two dozen staffers in Kuala Lumpur building, which next spring will become the first site to offer online Islamic stock trading. Looking toward an eventual IPO, Hashim is trying to raise $50 million to transform IslamiQ into an Internet portal she describes as “a sort of Yahoo for Muslims.” Other sites like and are also helping construct a community of Islamic investors. But for devoted Muslims, its a constant moral tussle against the interest-dominated world. “In Islam you have to weigh between the devil and the deep blue sea,” says Latifah Abdullah, who works at a travel agency in Singapore and keeps her money in banks, property and a tech fund. “Every system is eventually linked to this terrible system that makes the rich richer and the poor poorer.”

How to square a seventh-century moral code with modern finance? Happily, a new generation of Islamic scholars is proving open to creative solutions. Any respectable Islamic fund or financial institution has a board of scholars screening its investments and practices. And nearly all the scholars now agree, for example, that it’s OK for Muslims to buy equities. Stocks, says DeLorenzo, are “commitments to responsible ownership.”








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