Some Implications of Debt versus Equity-Based Financing in the Backdrop of Financial Crises بعض آثار الديون مقابل التمويل القائم على الإنصاف في خلفية الأزمات المالية

Hayat Khan

Journal of King Abdulaziz University: Islamic Economics, 2015, vol. 28, issue 1, 165-180

Abstract: Islamic banking and finance has its roots in the prohibition of Riba (which includes interest on loans and the sale of debt on discount), gharar (contractual uncertainty( )) and maysir (which includes gambling). These prohibitions (i) imply a ban on money generating money; (ii) require that any return on money must come from participation in real economic activities and (iii) restricts trade to items with property rights at initiation, which are building blocks of the conventional financial architecture. An alternative, based on the principles of Islamic finance, is widely referred to as equity-based financing where the underlying principal contracts operate under the equitable norm of risk-sharing. --

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:abd:kauiea:v:28:y:2015:i:1:no:7:p:165-180

DOI: 10.4197/Islec.28-1.7

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