Life Insurance in Islam - What You Need To Know
WHAT IS LIFE INSURANCE?
Life insurance is essentially a contract between a person and a life insurance company. In exchange for you making regular premium payments, the insurance company agrees to pay out a lump sum to your beneficiaries upon your death. Choosing life insurance policies can be a difficult task as there is a lot of information to plough through online. For Muslims, comparing and choosing a life insurance plan means that additional consideration needs to be given to insurance plans on the market that are compliant with Islam and Sharia laws and principles. Life insurance is about protecting those you love, and ensuring that when you die your estate is and interests are kept safe. Life insurance pay outs provide an essential benefit to dependants and family members. The life insurance policy does not insure the life of the insured, instead, it is more of a financial transaction that protects families of the deceased from unexpected financial risk in the future.
Whilst Islam does not expressly prohibit life insurance, there are some considerations that need to be borne in mind by those looking for Islam centred insurance products.
Life Insurance Plans In Islam
In Islam, life insurance is not seen as contradictory to any Islamic laws or principles. The last few decades have witnessed a monumental rise in the availability and popularity of Islamic banks and finance products in mainstream markets, offering Sharia and Islam compliant products such as Islamic mortgages, life insurance policies and Sharia compliant finance options. Mortgage loans in particular have become increasingly popular amongst people looking for banks that offer financial services that do not contravene any principles of Islam. Conventional mortgage loans were always deemed to be unlawful in Islam due to the interest (riba) elements.
Whilst most life insurance plans do not include interest payments, there have been some questions raised relating to the permissibility of life insurance, particularly when there is an element of risk involved.
Whether the life insurance policy is deemed to be halal in Islam is dependent on the type of life insurance policy you are dealing with.
What Are The Types Of Life Insurance
There are various types of life insurance policies available on the market. However, we will focus on two of the most common types of life insurance policy.
WHAT IS WHOLE LIFE INSURANCE?
This type of life insurance policy is one that ends on the date the insured passes away. Whole life insurance policies guarantee the family a pay out when the insured person dies. These types of policies continue to provide lifelong protection by the operators of the insurance policy. Whole life insurance is also known as life assurance. It essentially operates to ensure that whenever you die your family is protected financially when you die. There is no uncertainty about the monies being paid out, but you do have to maintain premium payments on an ongoing basis.
Whole life insurance is far more expensive than term life insurance when it is compared to term insurance (see below).
WHAT IS TERM INSURANCE?
Term insurance policies are considered to be protective insurance policies. These policies cover lost income when the insured dies and cover things like mortgage costs and the coverage protects you for a limited term.
One example of a term insurance policy is where a person is aged 30 and buys a term insurance policy that costs £20 a month. The terms of the policy guarantee a pay out to your beneficiaries of £100,000 if you die before you turn 50. If you do not die before you turn 50 then the policy comes to an end and the insurer is not required to make any payments. There is no guaranteed pay out to beneficiaries (unless of course the insured dies before they turn 50).
Although used interchangeably, the two terms - life insurance and life assurance - are very different. Both are forms of protection designed to pay out sums when a policyholder passes away. When you compare the two, however, it is clear that life insurance relates to a specific term and life assurance covers the whole life of the insured.
Islam And Life Insurance Plans
When it comes to Islamic life insurance policies, many scholars agree that when the principles of takaful are applied to insurance then it is deemed as permissible Islamically. Takaful is a form of insurance system that is compliant with Sharia law principles, and it basically involves the pooling and investment of funds.
Takaful is a form is Islamic insurance and is based on principles of cooperation, mutuality, joint interests and indemnity/ debt, solidarity, and common interests.
Policyholders of takaful policies are considered joint investors with the insurance operators. The vendors and the policyholders share in the pooled monies and they also share any losses. There is no guarantee of a positive return on investment, and there is no element of definite and fixed profits.
Muslims looking for Islam and Sharia compliant life insurance policies and products that contain terms that do not contravene Islamic laws need to ensure that they choose policies that do not include the following:
- any element of interest
- uncertainty
- high-risk
- ambiguous terms
- gambling
These are all prohibited in Islam.
The basic concept of takaful is that a group of people pool their funds together in a way that does not generate profit, but acts as a mutual benefit to those within the group.
Takaful is about communal, charitable ventures.
The principles of takaful in Islam can be summarised as:
- co-operation between policy holders
- losses and liabilities shared
- uncertainty eliminated or minimised
- No advantage for one party over another
In Islam, the concept of insurance is takaful based - a form of social solidarity. The takaful is based on principles of co-operation and trustees that safeguard the position of each person who has pooled their funds. Muslims looking for life insurance policies should seek to find products that are based around the concept of takaful.
Life insurance with takaful is considered to be fully halal, and provides financial protection alongside long-term savings.
Gharar And Life Insurance
Life insurance is considered to be an important financial planning tool, aimed at providing protection for the family and children of the deceased. However, Muslims looking for Islamic insurance products and services have raised the question about whether some life insurance policies, in particular term insurance policies, contain elements of gharar that deem the policies non-Islamic.
Gharar basically refers to uncertainty, risk, and deception. In transactions where there is a speculative element or a degree of uncertainty.
As term life insurance policies tend to involve an element of uncertainty about whether the pay out will be made (for example, if the insured passes away during the term of the insurance), there have been questions about whether this level of uncertainty leads to gharar. the uncertainty of death, that is only in the hands of Allah (SWT) is deemed to add a nuance of gharar to term life insurance policies.
Whole life insurance policies (life assurance policies) are deemed to be compliant with Sharia laws as there is no element of risk or uncertainty as the pay out is made on death. The certainty lies in the fact that we all die, and there is a guaranteed pay out.
Islam prohibits transactions where there is gharar - uncertainty. Whilst it can be argued that term life insurance policies have an element of uncertainty as none of us really know when we will die, modern insurance policies are less speculative than we like to think. Insurance companies will undertake due diligence based on the health and history of the insured to make sure that the risks are measurable and contained.
Also, it is important to note that, historically, Islam has permitted some gharar is transactions that provide a great benefit and this argument can be applied here.
Maysir And Life Insurance
Conventional insurance policies, particularly term insurance policies, require that policyholder could lose all the sums they have paid in to the policy if they do not die within the term. Maysir refers to the gambling element within insurance policies. In term insurance policies, whilst there is no profit element, if the insured does not die within the term then the insurance vendor does profit from the premiums paid in.
Islam prohibits gambling, and transactions where there are elements of gambling.
There are some Muslims who may think that term life insurance policies and products contain elements of maysir due to the uncertainty relating to the timing of the death, benefits, and pay out. However, unless a policy contains huge elements of uncertainty and elements of taking a gamble, it is unlikely that maysir fully applies. Ultimately, the responsibility lies with the person looking for the insurance policy to ensure that it does not contravene any Islamic laws or rules. This is why it is always best to search out policies that are based on Islamic finance rules.
Riba And Life Insurance
We know that riba (interest) is not permissible in Islam, and this is why so many mortgage loans and bank products on the market are not Sharia compliant. Riba usually comes into play in endowment insurance policies that promise a payment that is guaranteed.
Often in endowment policies, the insurance funds are invested in financial products and businesses that may contain elements of riba.
Islamic Insurance Policies
Muslims looking for insurance policies that comply with Islam and Sharia laws relating to financial products and services need to ensure that elements of uncertainty, risk and interest are not present in the insurance products they invest in.
Those looking for insurance policies that do not contravene any Sharia and Islamic principles should make sure that they undertake due diligence on the contractual terms of the policies and compare and contrast them.
We know that takaful is deemed halal in Islam, so any insurance policy that complies with the principles of takaful should also be deemed to be permissible. If you have a policy with insurers who invest the monies and the investment is in areas deemed haram by Islam (ie industries related to alcohol, gambling, porn etc), then you should look to switch to a policy that is more Sharia compliant.
Conclusion
The key to ensuring you have a life insurance policy that is Sharia compliant is to question what type of policy you have. Is it an investment based policy? Is there an exchange of money? Does it feel speculative? Where are the funds invested? Is there an element of risk that may lead to a cause of action against the insurance company? These are all questions that need to be addressed when looking for a Sharia compliant insurance policy.
Most reasonably minded people would agree that getting your financial affairs in order and protecting your family from financial risks in the future is a responsible action to take. Some people have speculated that taking out life insurance could incentivise others to murder the insured, but this is rarely the case. Insurance policies act as a form of protection, particularly for those who do not have substantial have assets or real property. Life assurance/ whole life insurance policies are considered to be compliant with Islamic rules.
Before you take out any life insurance policy, check for elements of gharar, riba and maysir. These three concepts are not permissible in contracts according to Islamic law.
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A sukuk is a form of financial certificate that is issued in compliance with Islamic finance principles and Sharia law. Sukuk is an Arabic word meaning 'deed, cheque, or legal instrument'.
The main purpose of a sukuk is to create returns for investors that are similar to the returns available on traditional fixed income bonds.
As the Islamic finance market has grown over the last few decades, so has the interest in and demand for sukuk bonds. Essentially, sukuk bonds are similar to traditional bonds in that they have parties who are involved in seeking a return on investment, and sukuk bonds are subject to the same credit rating as conventional bonds.
Sukuks are commonly used by corporations and even governments to finance their business operations.
Islamic Finance Principles And Sukuk
Sharia law does not permit investors to partake in investment activities that involve riba. The payment or receipt of riba (interest) is strictly forbidden in Islam.
Most conventional Western market bonds are based on an interest paying structure, and this is not permissible for investors who do not want to receive or pay interest on their financial investments.
Sukuks were first issued over a decade ago in Malaysia who were forward-thinking when it came to creating and supporting financial investment products that Muslims could be involved in. Bahrain was quick to follow Malaysia in issuing sukuks, and these days sukuks can be found in economies across the globe.
Sukuks take up a respectable share in the fixed income market globally. Sukuks have emerged as a great Sharia compliant alternative to traditional interest based bonds.
Sukuks offer Muslim investors the opportunity to invest in bonds and subscribe to certificates that represent the right to actually receive a share of profits that are generated by an asset base. The profits are generated by the asset base being traded on the market.
What do we mean when we refer to fixed income bonds? Sukuks are fixed income bonds. This means that they are fixed income investments and they can provide what is considered to be a more steady stream of income.
Islamic Bonds
Sukuks are considered to be Islamic bonds. They involve asset ownership which is direct, rather than indirect interest based bonds that Western markets tend to offer.
Any income, return, or profits generated from a sukuk cannot be derived from any speculative activity. This would render the return haram under Sharia laws.
So, how do sukuks work? What normally happens is that the issuer of the sukuk certificate will sell an investor a certificate. The proceeds of the sale are then used towards the purchase of an actual asset. The investor then has a partial interest in the asset based on their respective investment.
Another element of sukuk that is important to note is that the issuer of the certificate must promise that they will buy back the sukuk at a future date.
When it comes to sukuks, compliance with Sharia law means that any profits that are derived from the investment must be totally free of speculative activity and interest.
Sukuk Versus Traditional Bonds
As Islamic finance rules do not permit interest, this means that the traditional Western debt and loan instruments are not accessible to Muslim investors who want to comply with Sharia rules.
Sukuks have therefore become a great alternative for investors (Muslim and non-Muslims) to use sukuks as a viable alternative method of raising funds.
Sukuks are considered to be an interest in an asset, and not a debt obligation or debt instrument.
Conventional bonds and sukuks do have some similarities:
- Both traditional bonds and sukuks offer investors a stream of income payments. The payments on traditional bonds include interest payments, and the payments from sukuks are based on profits from the assets.
- Both bonds and sukuks are sold initially by issuers of the certificates.
- Sukuks and bonds are viewed as less risky than equity based investments
When it comes to ownership, sukuks allow for partial ownership of the asset, whilst conventional bonds are more of a debt obligation. Sukuks are not debt obligations.
It is also important to note that often, conventional bonds finance businesses or industries that are deemed to be haram under Sharia law principles. These haram industries include the gambling industry, alcohol industry, and porn industry. Sukuk bonds cannot be linked to any form of haram activity or industry.
HOW ARE SUKUK CERTIFICATES ISSUED AND HOW DO THEY WORK?
Sukuks are usually found in the form of certificates, also known as trust certificates. In the United Kingdom, sukuk certificates are regulated by the Financial Services Authority. In other countries and economic landscapes across the world where sukuk certificates are issued, there is similar regulation of them.
There is a very specific process for issuing any form of financial certificate including sukuk certificates/ bonds.
The steps below outline the most common steps that are involved in issuing a sukuk certificate:
- Normally a company that requires some form of capital will establish a special purpose vehicle that is known as an SPV for short.
- The company is known as the originator.
- The special purpose vehicle aims to protect the underlying asset from potential creditors in the event that the originator gets into financial difficulties.
- The special purpose vehicle issues the sukuk certificates.
- These sukuk certificates are then sold on to investors for a price.
- The originator uses the funds raised from the sale of the sukuks to purchase the asset they want.
- The special purchase vehicle will then purchase the asset from the originator.
- The special purpose vehicle will then establish a form of lease to lease back the asset to the originator.
- The originator will make the necessary lease payments to the special purpose vehicle.
- The special purpose vehicle will then distribute the lease payments to the investors.
- Once the lease is terminated, the originator will buy back the asset from the special purpose vehicle at nominal value.
- The proceeds of the sale are then distributed by the special purpose vehicle to the holders of the certificate.
Different Types Of Sukuk
As mentioned above, most sukuk certificates have been presented in the various global markets as trust certificates. It is very common for English common law to govern the law relating to sukuk trust certificates in different countries.
However, the management of sukuks varies from country to country so it is always advisable to do your research about the jurisdiction that regulates your sukuk. Information and transparency are key when it comes to any form of investment, especially sukuks. Where possible, always carry out an analysis of the sukuk product or service before you proceed.
The main types of sukuk are as follows:
- Trust certificates - in this form of structure the originator of the sukuk will create the special purpose vehicle and issue trust certificates to the investors. The proceeds are then used to build a portfolio of assets which will eventually yield a return.
- Civil law structures - these types of structures have emerged to enable sukuk transactions to be undertaken in accordance with the local laws of the country where the originator is based. One example of a country that used civil law structures when it comes to sukuks is Turkey. Turkey have passed their own legislation relating to sukuks which has to be complied with.
Sukuk For Investors
As Muslim investors have historically not had the opportunity to invest in bonds without an interest element, sukuk bonds have been welcomed across many global economies.
Sukuks are a great way of enabling investors to link returns with the cash flow of financing assets without the riba of traditional form of debt financing.
However, it is important to point out that sukuks as a form of financing should only be used for identifiable assets. Identifiable assets are those assets whose commercial value can be ascertained at any given point of time. Identifiable assets include things like real estate, equipment, cash, and stock.
In this way, the holder of the sukuk bond /certificate does not own a debt, but as the owner of the sukuk certificate, they own a share of the asset that is purchased using the sukuk funds.
Even though the special purpose vehicles that issue the sukuk certificates are usually brand new, this does not mean that investors will bear exposure to the credit risk of that special purpose vehicle.
Advantages Of Sukuk
Here are some of the main advantages of investing in sukuks:
- For those looking for investment from Islamic economies and markets there is a great marketing benefit to sukuks who will appeal to investors looking for Sharia compliant ways of investing their money
- Sukuks are known to yield similar profit on par with conventional bonds
- More bank and financial institutions are offering sukuk products (always check the website of any organisation offering Sharia compliant products to ensure that you have all the information you need)
- The investor base of Sharia compliant investors is vast and continues to grow
- In addition to the Islamic finance investment market, there is also potential to tap into the ethical investment market which has developed over the last few decades and is always in the news
- Issuers of sukuk certificates are entitled to the same tax arrangements as the equivalent traditional financing arrangements
- Assets that are acquired by the sukuk bonds are jointly owned
- Instead of receiving interest, the holder of the sukuk certificate receives actual profits
- Sukuks offer banks the opportunity and tools to invest their excess liquid assets
- Sukuks can operate for contractual terms that are agreed upon between the parties
- Sukuks continue to grow with success attracting all kinds of high-quality investors including Muslim and non- Muslim investors
- Sukuks have been used across various locations and industries including transport, water, power, education, infrastructure and industrial
Introduction
Across the world of finance, business, corporate transactions, and investments, adherence to ethical and religious principles is becoming increasingly important. People are actively searching for Sharia compliant venture capital which stands at the intersection of entrepreneurship and Islamic finance.
Not only does Sharia-compliant venture capital support businesses to operate within the rules of Islamic finance, but also ensures that they have adequate funding to innovate and grow.
Sharia-compliant venture capital facilitates and enables ethical growth and investment. What this means in the long-term for businesses is that they can ensure their growth is sustainable and stable.
WHAT IS VENTURE CAPITAL?
In its very basic form, venture capital is exactly what it says it is. It is capital (money) for a venture. It provides essential funds for (usually) start-ups or small and medium-sized enterprises that have potential for growth and want to minimise their debt. The aim of anyone investing in these businesses is to see a good return on their investment.
Investors or venture capital firms that invest in a business provide capital funding in exchange for ownership or some equity in the business.
For Muslims, venture capital is a move away from obtaining funding from banks which offer loans that do not adhere to Sharia principles. Primarily, conventional banks offer loans based on interest calculations and interest is prohibited in Islam.
In addition to funding, some venture capitalists offer advice and mentoring to the businesses they invest in. This can be a great boost for those looking for management expertise. This can come in the form of strategic guidance, access to networks, and business development opportunities. The aim is to accelerate the trajectory growth of the business.
To summarise, venture capital plays a significant role in supporting innovation. Many new businesses can struggle to secure the finance to enable them to grow as they do not have a trading history or record of achievement. Being able to access venture capital means ideas become innovations, and innovations can become successful.
Sharia Compliant Venture Capital
When it comes to Sharia-compliant venture capital we are referring to venture capital that operates within the parameters of Islamic finance. The principles of Islamic finance are based on ethical and socially responsible transactions, and zero interest-based lending.
Unlike the more traditional form of venture capital funds, Sharia compliant venture capital invests in those promising businesses that operate in Sharia-compliant industries. This means Sharia-compliant venture capital cannot invest in industries such as the porn, alcohol, or gambling industry.
More likely is that venture capital funds will invest in industries such as healthcare, sustainability, renewable energy, and education.
Innovation And Islamic Finance
A critical element of Sharia-compliant venture capital is to support and encourage innovation within the Islamic finance ecosystem. What this means for businesses and entrepreneurs is that they can pursue Islamic and innovative ideas whilst ensuring they can access funding in a Sharia compliant way.
One of the key concepts within Sharia compliant venture capital is the concept of risk sharing (mudarabah). What this means is for investors to provide the capital to entrepreneurs who use the money to grow and develop the business idea.
Any profits that are generated are then shared between the parties in pre-agreed terms and ratios. In a difficult and unpredictable economy, it means businesses can access finance and develop their product and services where otherwise they may not be able to.
Ethical Investments And Venture Capital
When it comes to investments, Sharia rules are strict and require that investments are fully halal. What this means is that venture capital cannot be spent on haram activities or industries.
Instead, venture capital investments must be used for ventures that are ethical and that contribute to society in a positive way. Not only does this ensure compliance with Islam, but also ensures that the capital is spent in a way that aligns with Islamic finance and the beliefs of the investor and business.
Islamic Finance And Entrepreneurship
When it comes to Islamic finance, money serves mainly as a medium of exchange rather than a tradable commodity value. For entrepreneurs with innovative ideas, they need the money to be able to scale and grow their idea into a profitable business.
When looking for Sharia-compliant venture capital businesses need to look out for:
- Mudarabah/ profit sharing: make sure any contract relating to venture capital investment is based on a fair and pre agreed payment ratio (with losses borne by the investor).
- Musharakah: in this type of partnership arrangement the parties share the profits according to the capital contribution.
- Advisors: make sure that you have access to a Sharia advisor who can advise on compliancy and ongoing compliance.
- Investment: any investment should be halal and in halal industries
- Annual disclosure: check and monitor Sharia compliancy and ensure you have annual disclosure for transparency
- Regulation: ensure there is a regulatory framework that is rooted in Islamic finance.
Ventures Supported By Sharia-Compliant Capital
Many businesses have been supported by Sharia compliant venture capital. The remit of businesses includes fintech companies, digital, and health care sectors.
For any new business or SME looking for investment, venture capital is often the perfect solution.
Venture capital plays a critical role in many different ways:
- provides financial resource and financial services
- supports early stage innovation
- facilitates experimentation and entrepreneurship
- provides guidance via the mentorship model
- offers long term perspective
- provides capital solutions
- offers market exposure
- enables SME to navigate new sectors
- focus away from the bank to the investor
- opportunity to scale growth and capital
- ecosystem and infrastructure development
Future Trends
The future of Islamic venture capital funds looks bright. The Islamic finance market is one of the fastest growing financial markets in the world. Accompanied by technological advancement and the increasing demand for Sharia-compliant products and finance, venture capital funds that adhere to Islamic finance rules will continue to grow.
The demand for ethical venture capital is not only driven by Muslims. There are huge swathes of communities who want to invest in a more socially responsible and ethical way. Not only does this generate sustainable growth, but also supports efficiency and economic prosperity for the long term.
Sharia-compliant finance operates within the Islamic finance financial model. What this means is that any financial product or service must adhere to Islamic rules relating to financial transactions.
The increasing popularity of Sharia-compliant finance is being driven by the growth in the global Islamic finance industry. However, many businesses and individuals are looking to Sharia-compliant finance to provide them with ethically based options and solutions. Ethical investors and the growing trend for socially responsible investing means Sharia compliant services are aligning with the values of many people across the world.
Sharia-Compliant Finance
Sharia-compliant finance must have the following qualities:
- Aligns with Islamic values
- Prohibition on interest/riba
- Ethics and morality screening
- Social responsibility
- Risk management
- Profit and loss sharing
- Ongoing monitoring and compliance
- Asset backed finance
- Avoiding speculation and ambiguity
Promoting Inclusion
Sharia-compliant finance is a great draw for ethical investors in the market looking to invest their money in ethical enterprises that promote individual inclusion and diversity. By providing equitable access to financial services, Sharia-compliant finance serves underprivileged communities who may not previously had access to products and services.
The focus on building inclusion and equity through transparency, information, and sharing of profits enables Sharia-compliant finance to promote inclusion.
There are several ways in which Sharia-compliant finance promotes inclusion.
- Prohibition of interest: the charging or receiving of interest is seen in Islam as an exploitative practice that is unjust and unfair.
- Avoiding speculation: keeping transactions transparent and equal makes them more inclusive.
- Ethical investment screening: screening for industries such as gambling and alcohol means that more focus is placed on environmental, social, and corporate governance.
- Asset backed finance: having transactions backed by assets leads to more clarity and equity between all parties.
- Risk sharing: this leads to greater inclusion as it removes the respective power of each party when coming into the financial deal. It also means that payments owing to the parties are fair and proportionate.
- Socially responsible investing: the onus on being socially responsible when investing or managing a portfolio places a responsibility on the investor to be conscious of working with marginalised groups.
- Sustainability: having a future focus on long term goals is a key element of Islamic finance.
- Fairness in contracts: Islamic finance emphasises the importance of having fair contracts and contract terms. Parties to a contract should act with integrity, honesty, and mutual consent.
Microfinance In Islamic Finance
Islamic finance recognises the importance of supporting small and medium businesses. Investment in these sectors and industries is encouraged.
Sharia-compliant finance understands that microfinance for small businesses is imperative for growth and sustainability. Often, small businesses can struggle to secure funding and capital. Islamic microfinance offers SMEs a lifeline with Sharia compliant finance solutions that are tailored to the business needs.
For investors, it means they can invest ethically, enabling entrepreneurs to access capital for business growth.
Risk And Profit Sharing
Risk and profit sharing is a key element of Islamic finance. What it means in principle is that partnership models such as Mudarabah and Musharakah are encouraged.
These partnerships enable entrepreneurs and financiers to agree on the terms of any profit sharing in a fair and transparent way.
Community Development Initiatives
Islamic finance encourages community development initiatives through mechanisms that align with Islam. The central principles of social responsibility and ethical investing mean that investors are required to act in a philanthropic way for the greater good of society. The outcome is that society benefits from the actions of the individual.
Sharia-compliant investments are directed towards the type of fund and project that positively impacts society. Investors looking for Sharia compliant investors prioritise investments in sectors that require funding such as healthcare, education, renewable energy, housing, and poverty alleviation.
These sectors have seen huge growth in recent years, so investing in them is often a win for the socially conscious investor and the initiative.
Staying Stable In Volatile Markets
Sharia compliant finance has demonstrated resilience and stability in volatile markets. This is due to its core principles of risk sharing, asset backed finance, and avoiding interest. Ethical investors are not looking for a quick and easy return, instead they want to invest in a stable and ethical sector.
As changes in interest rates affected the global markets in recent years, the Islamic finance investment market remained relatively stable as it is not dependent on interest backed lending or borrowing.
The value of the assets the finance is backed against provides some stability when the market becomes unpredictable.
Global Growth
Islam encourages a long term approach when it comes to investments. The focus is not on immediate profits, but long term sustainability and societal benefit. The principles of sabr (patience) and fairness in Islam mean that ethical investors investing using a Sharia-compliant framework are not always looking for an immediate return on investment. The aim is long term benefits and stable returns.
As the Islamic finance industry continues to grow, so too do the Sharia compliant finance options. Ethical investors from all backgrounds are pushing the drive for ethical and socially responsible investments.
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