The Principles of Islamic Finance

Islamic finance operates under principles that promote ethical, equitable, and socially responsible economic activity. It prohibits charging interest (riba), considering it exploitative, and emphasizes sharing risk and profit. Instead of interest, financial transactions often involve profit-and-loss sharing arrangements or asset-backed deals. Transparency, honesty, and justice are central, ensuring that investments are made in permissible (halal) ventures. The goal is to support sustainable growth while preventing greed and exploitation, fostering a financial system aligned with moral values and social welfare.