As Islamic finance facilitates greater financial and economic interlinkages between jurisdictions, this enhanced international dimension will bring about a new set of challenges presented by the fundamentally different operating environment of heightened competitive dynamics, greater uncertainty, and more complexity. This will require greater collaboration and cooperation at the global level in the endeavour to preserve global financial stability. The recent crisis has highlighted that financial integration across borders needs to be accompanied by international cooperation and coordination to prevent regulatory arbitrage across borders and the risk of implications for contagion. A stronger collective effort needs to ensure that Islamic finance is subject to consistent, high-quality regulation across borders through the application and enforcement of the international prudential standards promulgated by the IFSB. This would reduce the opportunities for regulatory arbitrage, which in turn, will contribute to a more successful international integration of Islamic finance. Beyond the prudential standards, a higher level of cross-border vigilance is pivotal to allow for appropriate and decisive actions to be taken pre-emptively to deal with any imminent financial distress. This underscores the importance of adequate coordination and cooperation among supervisors across borders in strengthening their responsiveness to risks associated with markets interconnectedness. In particular, more transparency is essential towards understanding the ramifications of national actions or inaction and the potential spillover effects from one country to another, whilst equally important is to recognize that financial regulation and intervention are subject to country-specific circumstances and hence, must fall within remit of national autonomy.

The Isuru Project enlisted the expertise, experience and the capacity of grass root level organisations in delivering the project services as retailers. Hence, the project was instrumental in the capacity development of a large number of community based nongovernmental organisations. This paved the way for the development of a large number of microfinance institutions which formed the microfinance infrastructure of the country. Some of these institutions operate at the national level and have the capacity to mainstream and become national level formal financial institutions 24 . It was necessary to assess the success of the project from the point of view of its main objective, i.e., helping the poorest of the poor to cross the poverty line within a given period of time. To assess this, two impact assessment surveys were conducted by the project office by employing hired field workers specifically trained for this purpose 25 . The findings of the two surveys are basically similar and have vindicated the cost incurred in financing the project: •  The head counting of the surveyed beneficiaries revealed that the percentage of female participants was around 67%, thereby confirming the national average (1997). This had increased to73% by 2005. •  75% of the beneficiaries had attended schools and were able to read and write (1997). This literacy rate was somewhat below the national average of 92%, but can be explained as due to the abject poverty with which the group under reference was afflicted and therefore had been disadvantaged.