The main operation of Indonesian Islamic banks is microfinance. Based on Bank Indonesia's Islamic banking model up to May 2013, the performance and estimation of the total assets, financing, and third-party funds are on track for the near future, with scenarios ranging from optimistic to moderate to pessimistic. This chapter investigates the effects of internal and external factors on the performance of the Islamic banking industry, such as its funding and financing activities. It elaborates on the factors affecting Islamic bank financing and nonperforming financing. The chapter assesses the resilience of the Indonesian Islamic banking industry, and recommends policies to be taken. Finally, it explores other Islamic financial institutions and the performance of the Islamic financial market, particularly sukuk and regulatory issues. Besides Islamic banking institutions, nonbank financial institutions—such as insurance (takaful), pawnbroking, mutual funds, and multifinance—also exist in Indonesian Islamic finance and have survived during unfavorable economic conditions.