Understanding Islamic Finance

Explores distinguishing features of the Islamic economic system, including the philosophical roots of ownership of resources and property rights, Islamic welfare, fundamental prohibitions (riba, gharar, maisir/qimar). Continues with an examination of the application of such values in the current Islamic financial system to contracts and trading in Islamic law, loans and debts, credit sale and bai’ murabaha, bargaining (musawamah), forward sales, leasing (ijarah), sukuk and securitization, and substitutes for traditional insurance (takaful). Concludes by presenting and addressing common critiques of Islamic finance in its current form.