Shariah Finance
Islamic finance is based on a belief that money shouldn’t have any value in itself. It’s just a way to exchange products and services that do have a value.
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Source Bank of England
What is Islamic / Shariah Finance?
Islamic finance describes a financial arrangement that adheres to the principles and provisions of the Shariah. It's an alternative financial system, co-existing with a conventional system, where monetary intermediation is achieved in ways different to lending.
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For example, a key aspect of conventional banking is the giving or receiving of interest, which is specifically prohibited by the Shariah. Instead, it's heavily based on trade and is asset backed. While the result of financial deal is the same, the steps taken towards accomplishing that deal are different to ensure compliance with Islamic law
Is Shariah Finance only for Muslims?
The strong underpinning of social responsibility means that increasingly, Islamic finance is seen as an ethical and fair alternative to all, regardless of whether they practice the Islamic faith or not.
Is there only one Islamic Banking Structure?
There are many structures however the most common and widely accepted structure in Islamic Finance is the Marabaha (sale and margin) structure which the one also adopted by RZQ Finance.
Other structures that are relevant include Ijarah (leasing arrangement) which is where a party purchases an asset and leases it to a counterparty. This is executable through a finance or operating lease.
Are there any sectors excluded ?
Only Ethical / Shariah compliant ventures are allowed. Prohibited sectors include Gambling, Alcohol, Tobacco, Non Halal Meat.
