Islamic finance
Islamic finance refers to financial activities conducted in accordance with Islamic law (Sharia), which prohibits practices like charging interest (riba) and investing in businesses that engage in activities considered haram (forbidden), such as alcohol or gambling. Instead, it focuses on ethical investment, risk-sharing, and profit-and-loss sharing, promoting fairness and social justice. Common financial products include profit-sharing agreements (Mudarabah) and partnership contracts (Musharakah). Islamic finance aims to foster economic stability and inclusivity, ensuring that financial transactions have a positive impact on society and the environment.
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Islamic finance refers to financial activities that comply with Islamic law, or Sharia. It prohibits certain practices, such as charging interest (riba) and investing in industries considered haram, like alcohol or gambling. Instead, Islamic finance promotes risk-sharing, ethical investing, and asset-backed transactions. Common instruments include profit-sharing agreements (like Mudarabah) and leasing arrangements (like Ijarah). The goal is to ensure fairness and transparency in financial dealings, fostering social welfare while generating profit. This type of finance seeks to create a balanced, ethical society by aligning financial practices with moral and religious values.