What differentiates Islamic finance from western banking? For one thing, interest payments are prohibited under Sharia Law - the code of behaviour and practices derived from the Koran. According to Islamic scripture, charging high interest violates the principle of profiting from other's misfortune. 'This means loans and capital raising have to be done in other ways, for example, often Islamic transactions take the form of a profit-sharing arrangement, or make use of other forms of financing such as a lease,' says Andrew Tebbutt, co-founder of Red Money Group, an information portal and financial training company dedicated to helping international financial institutions adapt their products and services to appeal to Muslim clients. At stake is US$250 billion in assets held by an estimated 1 billion Muslims worldwide, according to HSBC estimates. In addition, Islamic oil-producing states in the Middle East are flush with cash thanks to record petroleum prices. 'Other characteristics of Sharia-compliant finance include the elimination as far as possible of risk and uncertainty, and the idea that transactions must be fair, honest and equitable. There are clear distinctions between Islamic and conventional finance, although it could be argued that in the pursuit of innovative products and growth these distinctions are becoming a little blurred,' says Mr Tebbutt. He launched the company in 2004 with partner Andrew Morgan, each financing the sub-$650,000 start-up capital from their own pockets. The two had worked for several years in Hong Kong for British-based publisher and conference organiser Euromoney before deciding to strike out on their own. 'I'd love to say that it was purely philanthropic, but it wasn't,' Mr Tebbutt says. '[We] had been looking to set out on our own for a while and that meant identifying a financial market sector that hadn't been saturated by other companies. Few such opportunities in international finance existed. Islamic finance was, and still is, one of the only areas of significant potential growth in international finance today.' The two rejected the idea of establishing the company in Hong Kong and chose Kuala Lumpur instead, where office space is cheaper and the Islamic community is closer. The city also encourages Islamic finance as part of its economic sector growth plan. They moved to Kuala Lumpur in March 2004 and incorporated the company in June. 'One question we were frequently asked when we started was whether we were Muslims. People found it curious that two white, British guys, both named Andrew, were living in Malaysia and exclusively covering this previously somewhat insular market.' Getting past all the bureaucratic hurdles was challenging. The company struggled for over a year to get work permits. 'Salary costs in Malaysia are roughly a quarter of those in Hong Kong, which has meant we have been able to employ good local and overseas-educated Malaysians. Initially we were three people, now we are nine, and each person has been added when business revenue has been deemed sufficient to do so. 'We started in a very small office in a building opposite the Petronas Twin Towers in Kuala Lumpur, so rental costs have been minimised and the space has been well used - both very important facts. We are still in that building, but have just moved to a bigger office and bought some new equipment, so things are moving on.' The company has developed an online newsletter ( www.islamicfinancenews.com ) which is updated twice a week. Boasting 300 subscribers, the site provides news and analysis on what's happening in Islamic capital markets. The site is also used as a springboard for the marketing of Red Money's seminar and business training services. It has helped a growing list of organisations understand the structure of Islamic financial products through its executive education courses. And just what is the right solution to resolve the dilemma over earned savings on assets? When it comes to Islamic mortgages, call it a 'profit rate' instead, says Mr Tebbutt. He adds the company's next goal is to establish an office in the Middle East.