There is no doubt that the concept of risk was well known to ancient societies. Even in financial decisions, there is no doubt that people knew very well that lending to someone who is bankrupt has a high probability of losing your money as compared to a good standing debtor. Nevertheless, risk became an important tool of decision making when it becomes possible to measure risk and to assign values to different situations I select the best possible one. Therefore, I didn’t claim in this article that our forefathers didn’t know the concept of risk. Nor that they didn’t...

Once again, I would like to thank you all for returning to this page. Your continuing feedback and support is a great blessing and is much appreciated. I would also like to thank all those of you who reached out to me on my retirement from INCEIF at the end of June, your messages of support mean a great deal to me.And so, it goes. Well the first few weeks of retirement have been interesting. Busy, varied and on occasions not entirely what I had expected. The challenge, for me, is getting into a new routine that allows me to be as productive and effective as when I was working full time. So...

OverviewIslamic finance and infrastructure funding are, in principle, highly compatible. In numerous ways, infrastructure finance – with its focus on social benefit, grounding in the “real economy’, and linkages to tangible assets – captures the core spirit of Islamic finance. Take the World Bank survey to help us understand how practitioners view the application of Islamic finance to infrastructure funding The conceptual match between Islamic finance and infrastructure funding is clear. In practice, important breakthroughs and milestones have been achieved in...

As I have begun working on the creation of a Central Islamic Finance Council for the United States Islamic finance industry, some of my professional colleagues have been critical, sending me messages including the following:“My initial reaction is that this is not a good fit for us. We are not in the midst of an environment in which Islamic finance would be a draw for us.”“I note that the goal is to establish a world without interest, and you must realize that not everyone is going to buy into that ideal or value proposition.”I chose to include these responses in...

 Prohibition of riba, gharar, jahl, darar and other constraining norms in Islamic finance does not constitute an obstacle in building sound microfinance products. On the contrary, the need for Shariah compliance has led to considerable research into product development. While the conventional system provides for simple interest-based deposits, donations and loans, the Islamic financial system comprises an array of instruments for mobilization of funds, financing and for risk management. Instruments for Mobilization of FundsInstruments for mobilization of funds may be broadly divid...

Once again, I would like to thank you all for returning to this page. Your continuing feedback is a great blessing and is much appreciated.As many of you will have heard, I shall be retiring from INCEIF shortly. This does not mean that I am retiring from Islamic Finance and Life in general. It does mean I shall be able to spend some more time with family and to reflect and act on some key focus areas with which I will still continue to be engaged. Make no mistake, I shall remain involved at INCEIF, but just in a different role.In many ways I am looking forward to the next phase of my life...

Can we consider the word "bank" a suitable name and therefore model before considering its application into Islamic finance?A little bit of a philosophical and historical question. The deficiencies that face Islamic finance nowadays are not a simple cyclical problem which impedes any economic phenomena but rather a structural problem coming from the origin of the practice.The practice of banking began from around 2000 years BC as simple tools to provide working capital for traders who carried goods between cities. Etymologically speaking, the word bank came from Old Italian "banca" wh...

Once again, I would like to thank you all for returning to this page. Your continuing feedback and engagement from each article I have written over the last year or so remains a great inspiration to me, as well as, providing me with some reassurance that there are people out there who are willing to read, learn, change and take action. Undoubtedly we have much work to do and not a moment to lose!This month I would like to build on the discussions we have been having over the last few months and reflect on the work we have to do in order to further promote the values of Islamic Finance. In...

The new trend in corporate self-branding is currently social & environmental responsibility as the pressure of civil communities and international NGOs push them to engage more funds to compensate their "collateral" damages. Hence, all CSR strategies do not differ much from any other marketing strategy that aims to duff stakeholders to how much corporate do really care about society and environment when internally, it is just a matter of cost and profit.However, we cannot put much blame of these companies as they're just following a capitalistic model that condenses every move into how...

A strengthening of legal, information and governance infrastructure for Islamic finance at the national level is part of the broader strategy needed to develop efficient and liquid money and capital markets in Islamic finance instruments and enhanced access to a wide range of financial services. The strategy to develop institutions, markets and infrastructure needs to be properly prioritised, and be supported by appropriate risk mitigation policies in order to maintain stability. Key elements of this strategy are: Recognise more explicitly the position of Islamic finance in financia...