Islamic Finance

In this paper the author discusses the experience of the Sudanese Islamic Bank (SIB) in the implementation of Islamic banking services in the rural sector. The author provides overview of divergence between theory and practice in Islamic banking as well as their ideology and strategies. Furthermore, he provides overview of the experience of the SIB in the rural sector of Sudan and examines SIB’s cooperation with international aid agencies and institutions involved in rural sector development.

The authors in this paper provided the analysis of the stability of an equity financed budget deficit in an interest free Islamic economy. In order to do so, they have developed a small closed economy theoretical macroeconomic model broadly consistent with the Islamic tenets. The study resulted that under a strong wealth effect the instability of an equity financed deficit is not always the case, and that properly implemented fiscal policies may have positive contribution in terms of enhancing the output of the economy.