Alternative Banking Systems and Economic Growth

This paper examines the connection between the presence of Shari\u27a compliant (Islamic) Banking institutions and growth rates observed in their respective countries. This subject is of increasing importance as Islamic banking has emerged as a competitive and a viable substitute to conventional banking systems in the past four decades. Islamic banks operating in parallel to conventional interest-based banks and their effect on the economy is still undetermined by scholars. This paper explores the principles and spread of Islamic banking, and uses OLS regressions to estimate their impact on national growth rates