Shariah-compliant finance
Shariah-compliant finance refers to financial practices that adhere to Islamic law (Shariah). This means avoiding activities considered haram, or forbidden, such as charging interest (usury), gambling, and investing in prohibited industries like alcohol or pork. Instead, it emphasizes ethical investing, risk-sharing, and tangible assets. Financial products often include profit-sharing arrangements, leasing, and partnerships. To ensure compliance, many institutions consult Shariah scholars. The goal is to promote fairness, transparency, and social responsibility while providing financial services that align with Islamic principles.
Additional Insights
-
Shariah-compliant finance refers to financial activities conducted in accordance with Islamic law (Shariah). This means avoiding practices that are prohibited, such as charging interest (riba), investing in businesses involved in alcohol, gambling, or pork, and engaging in excessive uncertainty (gharar). Instead, it emphasizes ethical investing, risk-sharing, and fairness. Financial products might include profit-sharing agreements, leasing, or joint ventures. The goal is to ensure that financial transactions align with Islamic principles, promoting social justice and economic wellbeing without exploiting others.