It accounts for only one per cent of global assets today, but Islamic finance is growing fast and it offers an interesting alternative to the way the financial sector operates across much of the world.

That was part of the message presented by Belaid Jheengoor, a Bermuda-based chartered accountant and asset management executive, when he spoke to Hamilton Rotary Club yesterday.

He also noted there was still room for a jurisdiction, such as Bermuda, to emerge as an Islamic insurance and reinsurance leader.

“It is worth exploring,” said Mr Jheengoor, who is an Islamic finance specialist. He has spoken on the subject at international conferences, including the 2011 World Islamic Banking Conference.

Before presenting aspects of his research to Rotary members, he pointed out that he was speaking in his personal capacity, expressing his own views and not those of his employer.

Mr Jheengoor said Islamic finance was about “creating wealth responsibly, sharing it and putting a focus on fundamental values”. He added: “It has universal application; it’s not just for Muslims. It’s a global form of alternative finance.”

He said financial transactions were based on Islamic principles, with integrity, trust, transparency and fairness among the touchstones.

Profit, loss and risk are shared. “If there is a loss, the lender or investor shares the loss. If there is a profit, the lender or investor shares the profit,” said Mr Jheengoor.

Other principles in Islamic finance include the adherence to good ethics and governance.

Islamic bonds, known as sukuk, are different from mainstream bonds. Under Islamic law they are not permitted to charge or pay interest.

Giving an example of how a sukuk might operate, Mr Jheengoor said such a security could be used to build a highway. “The investor is refunded from highway fees, a form of profit allowed under Islamic law,” he explained.

Islamic insurance and reinsurance are known as takaful and retakaful, and they also observe the rules and regulations of Islamic law.

Raising the question of whether Islamic finance can operate within a secular society, Mr Jheengoor looked to the past. He said that in the Middle Ages principles of Islamic finance were adopted and incorporated by European jurisdictions. Genoa and Venice, at that time city-states, were at the forefront of trade between Europe and Islamic countries.

Today, the largest domestic markets for Islamic finance are Iran, Malaysia and Saudi Arabia. According to The Economist, the total value of Sharia-compliant [Islamic finance] assets last year was $2 trillion.

A number of non-Islamic countries and jurisdictions, including the United Kingdom, Ireland, Luxembourg, Jersey and South Africa, are building their presence in aspects of Islamic finance, said Mr Jheengoor. He added that the sector, while still small in terms of global assets, was experiencing double-digit growth.