The Rise and Decline of the Islamic Banking Model in Egypt

Samer Soliman

in The Politics of Islamic Finance

Published by Edinburgh University Press

Published in print February 2004 | ISBN: 9780748618361
Published online March 2012 | e-ISBN: 9780748653089 | DOI:
The Rise and Decline of the Islamic Banking Model in Egypt

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Islamists contend that Islam must apply to all aspects of material as well as spiritual life. Within this paradigm, Western institutions are bound to fail because they are alien to the value-systems of Muslim societies. In addition to the profit-generating aims, Islamic economic institutions are expected to be motivated towards benefiting their societies. To date, the most important manifestation of this idea of value-driven economic institutions has been Islamic banks, which emerged in Egypt in the late 1970s. In addition to Egypt's role as the motherland of Islamic fundamentalism in the 1920s, it is also considered by much of the literature on Islamic banks to be the birthplace of Islamic banking. Egypt's specific case of economic Islam provides important insights into the outcome of attempts to build modern institutions through the mobilisation of religious symbols and codes. This chapter determines whether Islamic banking was a facet of the Islamisation of Egyptian society, arguing that Islamic banking was not an inherent or embedded characteristic of Muslim societies which was simply waiting to be discovered or revealed. Rather, the emergence of Islamic banking in Egypt is firmly located in the rise of Islamic fundamentalism and the state's investment in this movement. Far from being a latent element of Islamic culture, Islamic banking is instead a creation of the state and of a coincidence of social and political forces.

Keywords: Islamists; Islam; Egypt; Islamic fundamentalism; Islamisation; banking in Egypt

Chapter.  9723 words.  Illustrated.

Subjects: Society and Culture

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