To achieve this greater awareness will require both openness on the grounds for the rulings  BIS central bankers’ speeches  3  and in-depth research on the basis of such grounds. A recent study conducted by the International Shariah Research Academy for Islamic Finance (ISRA) on fatwas of Shariah boards in the Asian region and the GCC countries reveals that, contrary to the popular perception, there are more similarities than differences in Shariah resolutions between the two regions. The study by ISRA however further indicates that there is a lack of awareness on the Shariah justifications to most of the resolutions being reviewed. This awareness is essential to pave the way towards greater understanding and nurturing of mutual respect. Whilst there are some initiatives to enhance the greater awareness on the juristic reasoning in Islamic finance, to facilitate greater mutual recognition, it will require greater transparency in the Shariah rulings in addition to constructive dialogue on the grounds of such rulings. With the efforts of the Islamic Development Bank (IDB), the Islamic Financial Services Board (IFSB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI), it has facilitated greater cross-border engagement among practitioners and Shariah scholars. In turn this has contributed to a greater understanding on issues and challenges faced by the industry and the progressive convergence of Shariah views and rulings. More such international collaborative work and engagement would further facilitate this harmonization process.

Islamic financing instruments currently comprise only a small fraction of microfinance business in the Organisation of Islamic Cooperation (OIC) countries. While there are success stories on the application of Islamic finance principles in microfinance programs, there is potential to have better models for Islamic microfinance. In addition, it should also integrate with other financial products such as microtakaful and other social welfare tools such as waqf to create a viable and impactful microfinance initiative. There are also immense opportunities for Islamic finance to leverage on the productive potential of small medium enterprises (SMEs) through greater application of equity-based structures in such financing structures. There is seemingly a natural fit between Islamic finance and SMEs financing in that both strongly promote entrepreneurship and value-creating activities. The third value proposition of Islamic finance refers to its emergence as new vehicle in bridging economies and contributing to increasing the financial linkages, in particular, the emerging markets. Previously Islamic finance was domestic centric. It is now increasingly providing financial solutions for cross border trade and investment. Progressive liberalisation has facilitated the internationalisation of Islamic finance. This has been reinforced by the dynamic pace of innovation in Islamic finance that has widened the range of financial products and services. This internalization process has thus contributed to the more efficient allocation of funds across borders from centres with surplus funds to regions with investment opportunities and to the diversification of risks. The now more developed Islamic financial markets have been particularly instrumental in intermediating such funds.