When “Islamic finance” is mentioned, ideas of the latest Gulf mega-projects spring to mind. However, for millions of Muslims throughout the Middle East, Islamic finance is analogous to a credit union in the United States. In places like Jordan and Turkey, the system is witnessing considerable growth, but for quite different reasons.   While Jordanians look to Islamic finance as a route to development, the Turks use it to fight inflation.

Islamic finance is predicated on the central assumption that everything, including money, belongs to God, and that humanity is simply custodians thereof. That central concept is expounded upon in shariah to include prohibitions on interest (riba), excessive risk (ghayar), and the commoditization of money and certain basic foodstuffs. Additionally, trade in certain haram activities is prohibited entirely. For the investor keen to utilize Islamic finance, that means any arrangement made with a bank must see risk shared equally and all money exchanged for something tangible that is not gold, silver, or food. Further, since interest cannot be charged, both sides of a contract must agree either to a set fee or a profit-sharing arrangement.

Sukuk, often compared to bonds, are used to secure financing for large projects. While a bond in the Western sense is levied for the funds required, a sukuk is guaranteed by ownership of actual goods, such as the equipment, land, and the time-value of the workers. For retail bank customers, these same ideals of sharing risk and avoiding uncertainty are present. One Islamic instrument, takaful, acts as a substitute for insurance by letting clients pool their resources to act collectively. The resources are managed and invested for growth, just like a traditional insurance company, but at the end of a predetermined term the takaful shares profits with its holders. The system has gained considerable ground in the Gulf, Pakistan, and Southeast Asia, as well as London.

Despite not having the massive incomes to be found in the Gulf, Islamic finance has done remarkably well in Jordan. Four Islamic banks operate in the kingdom, representing a fifth of the total retail-banking sector there. One of the most important Islamic banks in the Gulf, Dubai Islamic Bank, has long done business in Jordan. Islamic banking is successful in Jordan because it continues to focus on the needs of its clients and provide a route to investment from foreign Muslims who embrace Islamic finance. Even a recent sukuk, a $350 million dollar offering, placed emphasis on expanding other parts of the economy through water and electricity infrastructure. Much of the funding for this project came from the Gulf.

Jordanian Islamic banks are also helped by a low inflation rate. At -0.9 percent in 2015, Jordan’s is the 16th lowest in the world. As a result, the bar that must be met for an Islamic bank to be profitable is much lower than it would be elsewhere. A 12 percent nominal return, a moderate amount for many Islamic banks, would return 12.9 percent in real terms, similar to the performance of well-managed investment portfolios. Additionally, given the limits of speculation and excessive risk that are required as a result of Islamic financial principles, there are considerable controls built in to safeguard against runaway inflation. These moderate returns, coupled with low inflation, are helping to increase the market share of Islamic banking in Jordan, as well as demonstrating what Islamic banking can do in a middle-income country.

Islamic finance is also growing rapidly in Turkey. Currently, it only makes up 6 percent of the total Turkish retail-banking marketplace, but is growing rapidly. During the first six months of 2015, Islamic banking 40 percent faster in Turkey than its global average. If trends hold, Turkey should meet its Turkey 2023 Vision goal of having 15 percent of the retail-banking market comprised of Islamic banks.

Interestingly, much of this growth is homegrown and encouraged by the government. For much of its history, high inflation rates have plagued the Turkish economy, especially its financial sector, with the current inflation rate at 7.1 percent. That means that the same 12 percent nominal profit that produced almost 13 percent real profit in Jordan would only produce 4.9 percent in Turkey. For years, that has kept many of the larger international players in Islamic finance away.

To kick-start growth in Islamic finance, the Turkish government has opened Islamic “windows” at state-owned banks that permit ordinary retail banks to offer Islamic financial services. Additionally, the government has backed sukuk that seek to grow the Islamic financial sector itself.

Clearly, Islamic banking is important in Turkey, and the government is playing a massive role. Some may be tempted to point to President Recep Tayyip Erdogan and his Justice and Development Party (A.K.P.) for fostering a financial system that benefits their largely Islamist base. While encouraging Islamic finance is certainly a shrewd move by Erdogan both at home and abroad, that is not the only reason. Islamic finance represents an opportunity to fight inflation, a longstanding thorn in the Turkish economy. In fact, it was following the 1980 coup that the secularist military sought to expand Islamic finance in order to limit inflation. If Islamic finance continues to grow, it could prove to be a silver bullet that finally slows inflation.

Policy planners in Ankara cannot help to have noticed both the growth and the stability that comes with Islamic finance, and political advisors have seized upon the opportunity to further appeal to more conservative elements of Turkish society as an added benefit. Curbing inflation could be a major legacy of Erdogan. Their Jordanian counterparts recognize too that because of this stability, Islamic finance can be used to enable growth in other areas by encouraging investment from other wealthy Muslim economies. For those further afield, the examples of Turkey and Jordan demonstrate that Islamic finance can provide meaningful economic stabilization and growth.