Islamic finance is a participatory and ethical form of finance. It is based on principles set by Islam to ensure justice, fairness and transparency, and is focused on circulating funds in the real economy. A fundamental feature of Islamic finance is that the charging of interest on money is not allowed, as this creates injustice by transferring risk to only one party. Historically usury (lending with high interest rates) is also not allowed in other faiths and various civilisations. Returns are thus made from trading activities, services rendered or from joint-ventures which result in profit-and-loss sharing. Islamic finance also avoids sectors with a negative impact on society such as alcohol and tobacco.
Shariah Compliance