Abstract In view of the economic problems of the present age and the inability of neoclassical economics to analyse them and suggest acceptable solutions, Islamic economics holds promise for the future. This article consists of four parts. The first introduces the Islamic worldview and economic objectives of Islam. The second part argues that only Islamic economics has the potential to respond to the economic problems of the future. Part three sheds light on major Islamic economic institutions as they exist today. It points out the problems and challenges of these institutions. The last part presents some concluding remarks.