Religious basis of Islamic financial products: mudaraba, musharaka and murabaha
DOI:
https://doi.org/10.26577//EJRS.2023.v34.i2.r8Keywords:
Islamic finance, theory, usury, Islamic financial products, mudaraba, musharaka, murabahaAbstract
In the 20th century, after the most Muslim countries got their independence there was a trend towards the revival of religious values. It was often said that Islam is a universal religion covering various aspects of life, initiatives were put forward to apply Islamic teachings in the socio-economic sphere of society. One of the main issues discussed in society was the activity of conventional banks. The rejection of interest-based loans among Muslims that is offered in conventional banks necessitated the idea of creating an alternative financial system in accordance with the principles of Shariah. This article sheds light on the historical preconditions for the emergence of the first theories of the Islamic financial system and analyzes the semantic content of the theories. In particular, a comparative analysis was conducted to compare theories about sharing and debt creating contracts and the objectives of the prohibition of usury was studied. The efficiency of sharing and debt creating Islamic products in performing the financial intermediary function was discussed. One of the main research questions asked was: What are the factors that caused different rulings on interest-based loan and differed sale? It was concluded that Islamic finance does not reject the economic value of time and that the reason of the prohibition of usury is because it is unjustified increment taken from borrower’s property.
Keywords: Islamic finance, theory, usury, Islamic financial products, mudaraba, musharaka, murabaha.
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