Guide to u.S. Islamic Finance Provider Landscape and Market Shares

Analysis

The U.S. Islamic finance market operates across three segments. Retail Islamic Institutions include University Islamic Financial (UIF), Devon Bank, and Guidance Residential, which offer Shariah-compliant house finance, small-business loans, and deposit plans. Their fundamental approaches include murabaha (cost-plus) and ijara (lease-to-own), which resemble conventional products in economic effect but abstain from charging or paying interest. Guidance Residential controls an estimated 35% share of the Shariah-compliant house financing market. Its declining musharaka mortgages resemble standard amortization schedules while shunning interest. University Islamic Financial in Michigan implements murabaha to finance purchases. Devon Bank operates Shariah-compliant 'windows' serving both conventional and faith-based consumers. Investing firms like Saturna Capital's Amana funds, Azzad Asset Management, and other Shariah-compliant investment companies screen out forbidden industries, appealing to both Muslim and ethically concerned non-Muslim investors. Saturna Capital's Amana Growth Fund was valued at around $1.46 billion. Wholesale Market Players like Shariah Capital introduced unique strategies (e.g., arboon-based short selling) to serve hedge funds under Shariah limitations, though the wholesale market remains underdeveloped compared to retail.