Islamic Venture Capital- a tool for Social and Economic Development

Venture capital is a source of funding for entrepreneurs. Any entrepreneurial activity is directly proportional to the economic growth of a country. Venture capital encourages entrepreneurs in a country, but the traditional objective of venture capital is to invest in an entrepreneurship venture, breed it, grow it and sell it at a huge profit. This fundamental concept of VC is carried forward in Islamic venture capital but follows the basic tenets of Islam and shari‘a. The first half of the paper redefines the concept of Islamic venture capital and underlines its role in the social and economic development of a country. It emphasizes that by encouraging Islamic venture capital, entrepreneurial activity can be exploited to its fullest potential. This would result in economic development coupled by social development, resulting in the removal of social evils such as poverty and unemployment. The latter half of the paper suggests a working model for Islamic venture capital. There exist a