Islamic banking and finance in Sri Lanka

The Sri Lankan market, including that for Takaful, faces several challenges, however. One is the current legal environment, which is deemed unfavourable to Takaful operations.

Other hurdles are reluctance on the part of regulators to introduce the necessary changes in law to encourage the development of Takaful, a lack of investment opportunities that are Shariah compliant and acceptable to the insurance regulators, a high capital requirement, severe competition, consumer resistance to a new form of insurance based on religious principles and the fact that Muslims represent only about 9% of Sri Lanka s population.