Research Proposal Focus There have been concerns over the practices of Islamic financial institutions. It has been claimed that Islamic financial markets do not match with conventional financial markets. The practices of Islamic financial institutions remain a challenge to non-Muslim financial markets, as well as non-Muslim investors. This research is set to explore business cultures practiced by Muslim financial institutions. It will additionally compare Islamic and conventional financial markets. Background to the Study Islamic financial institutions are generally guided by Shariah Law, which prohibits charging of interest rates. It also prohibits Muslims from investing in derivates and other ‘impure markets’. If an individual is offered a loan by a bank, he or she may not pay an interest rate or fine incase he or she defaults paying installments or the principle amount within the agreed period. He or she will pay the contracted amount only. Recently, several financial products that comply with Shariah law have been designed to match the needs of Muslims. Problem statement Financial products provided by Islamic financial institutions continue to be a problem to the conventional financial markets. Laws regulating Islamic institutions do not put strict measures as regards to disclosing full financial information. This poses a challenge of hiding crucial information that would guide an investor in making prudent decisions. Islamic economy is more vulnerable to problems of illiquidity, considering that the market is very thin and underdeveloped. Objectives  1. Examine the effects of Shariah principles to the performance of Islamic institutions in non-Islamic world  2. To compare the growth rate of Islamic and conventional financial institutions  3. To establish the quality and effectiveness of Islamic financial products and services Literature Review The Islamic populace refers to interest rate as Riba. According to them, Riba is anything that is paid above the amount loaned to any individual or institution. The Shariah Law is strict with individuals or institutions tending to invest in businesses prohibited by the provisions Shariah (Clement, & Springborg, 2010). Such individuals face the law by being imprisoned for a certain period according to the level of offence they committed. Generally, acts prohibited by Shariah principles are commonly recognized as Haraam (Abdurrahman, 2010). Both private and public institutions comply with these regulations in their entire financial practices (Mamarinta, 2002). It is estimated that over 300 Islamic financial institutions across the world operate in accordance to Shariah Law (Sohrab, & Farhad, 2006). These institutions, which range from investment banks to commercial banks and insurance companies, are located in 51 nations. Through various analysis and estimations, it has been concluded that Islamic financial institutions grow at an average rate of between 11% and 16% every year. However, these institutions indicate a low level of participation in the bond market commonly referred as Sukuk market by Muslim investors (Abu, & Faruq, 2010). Sukuk market have not been vibrant for the last one decade given the strict law provided by the Shariah principles regarding the interest rates charged on such market securities. Due to high earnings obtain