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Globally, the ship finance sector is facing one of the worst crises in terms of getting finances for their projects. Shipping companies are finding it tough to get conventional bank financing due to strained liquidity and tight credit conditions. The ship finance sector is facing one of its darkest times. Historically, ship finance was undertaken by International Conventional Banks and these banks have been hit so hard that a few of them may face bankruptcy. Despite the gloomy outlook for the global economy which has affected the entire industry and projections that depict the recovery of the global economy as an “L-shaped” rather than a “V-shaped” curve. The shipping sector has had seven huge years before “falling off a cliff” due to the global credit crisis. Banks in the region are still reluctant to lent money, and as long as banks don\'t start lending the shipping business is not going to go up. Banks are sitting on the debts of poor performing companies and have not been quick to enforce their rights. 2009 was a year when facilities were amended and defaults waived which is happening throughout the world. The question remains to be seen as to whether or not there is sufficient equity within the shipping sector to keep the ship owners going over the coming year or whether we are experiencing a \'W\' type of recessionary curve with the second downward part of the curve to hit the markets in 2010. Considering all above issues with the conventional banking system to support the shipping industry moving, Islamic finance is emerging as a credible alternative source of ship finance.