Principles of Islamic Finance

Islamic finance is based on principles that promote ethical, fair, and risk-sharing economic practices. It prohibits earning interest (riba) and engaging in investments involving uncertainty (gharar) or unlawful activities (haram). Instead, it emphasizes real economic activity, where profits are earned through genuine trade and partnership, ensuring risk is shared. Financial products are structured to promote social justice, transparency, and fairness, fostering economic development aligned with Islamic ethical values. This approach aims to create a balanced financial system that benefits individuals and communities while adhering to Islamic religious principles.