Islamic banking is set to rise from its modest two per cent share of UK bank assets as the government encourages growth and British Muslims overcome their suspicion, Sharia lender Gatehouse Bank said last week
"The government is very keen on social inclusion and economic inclusion and it feels that still there are areas of the UK where there's not enough economic inclusion," Gatehouse chairman Richard Thomas said on the sidelines of an Islamic finance forum in Malaysia.
"So they feel that if they open up alternative finance such as Islamic finance then that will allow people to be included in the British economy in a way they weren't before."
Britain intends to issue its own sovereign Sharia-compliant sukuk debt in a rolling programme worth around £2 billion ($3bn), although it has said legal barriers still remain and it will make a final decision later.
Thomas said Britain's Muslim population of three million could help drive the industry's growth, although they needed to overcome their suspicion about Islamic banking.
"The domestic side has been much slower because British Muslims find it difficult to trust Islamic finance," he said.