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Principals of the Islamic finance:A focus on project finance

Hussein Elasrag

MPRA Paper from University Library of Munich, Germany

Abstract: Islamic finance is one of the fastest growing segments of global financial industry. In some countries, it has become systemically important and, in many others, it is too big to be ignored.Islamic finance is based on shariah, an Arabic term that often is translated to “Islamic law.”Shariah provides guidelines for aspects of Muslim life, including religion, politics, economics,banking, business, and law.The basic sources of Shari’ah are the Qur’an and the Sunna, which are followed by the consensus of the jurists and interpreters of Islamic law. The central feature of the Islamic finance system is the prohibition in the Qur’an of the payment and receipt of interest (or riba). Islamic finance is a rapidly growing industry. While it represents a small proportion of the global finance market (estimated at 1%-5% of global share), the Islamic finance industry has experienced double-digit rates of growth annually in recent years (estimated at 10%- 20% annual growth). Industry experts estimate that assets held under Islamic finance management doubled between 2007 and 2010 to reach around $1 trillion. This paper tries to note the main Principal of Islamic finance. In addition to discuss the Improvement can be made in several areas to promote and enhance the providing Islamic financial services.

Keywords: ISLAMIC FINANCE; ISLAMIC ECONOMICS; Shari'ah law; Islamic Bonds; ISLAMIC BANKING (search for similar items in EconPapers)
JEL-codes: G2 G21 O16 (search for similar items in EconPapers)
Date: 2011-04-09
New Economics Papers: this item is included in nep-ara, nep-cfn and nep-cwa
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