What is Islamic financing?

Islamic financing is a form of funding that corresponds to Islamic laws around money and business practice. Islamic financing is also known as Islamic banking and many financial companies around the world offer Islamic banking to Muslim customers, especially in the Middle East. However, you do not have to be a Muslim to take advantage of Islamic funding, and some non -Muslims consider Islamic financing the conditions more pleasant than for secular banking and financial arrangements. The first is riba , which is commonly translated as "usury", better known as "exploitative interest". In particular, Islamic Law prohibits accounting or paying interest, and since most loans include interest rate, devoted Muslims cannot use traditional financing to buy cars and houses or financing education. Muslim law also prohibits the involvement in Haraam or forbidden practices that include the production and sale of alcohol and pornography. They also use different creativeTechniques to go around the ban on paying interest so that Muslims can still get loans and financial assistance.

For example, a bank could buy a house or a car and rent it to the customer or sell it in installments for profit. Since the bank does not charge interest, the loan is considered acceptable. The bank could also offer a business loan in return for a share of profit for a specified period of time and it distinguishes it as a fee rather than for interest. In Islamic financing, many other techniques can be used to connect the Muslim community with the sources of loans WHICich can be used to improve.

Islamic financing began in Egypt and from there it spread around the Middle East when Muslims began to see the attraction of religiously acceptable financing. There is some debate in the Muslim community about whether Islamic funding is fully acceptable. Some people claim that riba is a term with a liquid andAn unclear definition and that Qu'ran prohibits loans involving in general, not just about the usure interest. Others feel that without Islamic banking, the Muslim world would not have the opportunity to compete on the same basis because of the lack of financial liquidity, so that the benefits of Islamic funding predominate over a possible disadvantage.