Shariah Foundation and Applications in Microfinance by Muham

Top 20 FREQUENT WORDS

islamic 37 finance 31 riba 28 principles 26 prohibition 13 allah 10 profit 9 loss 8 sharing 8 god 5 sale 5 surah 5 ahadith 4 banking 4 economic 4 principle 4 productivity 4 swt 4 bay 3 believers 3 benefit 3 conventional 3 debt 3 debtor 3 entrepreneur 3 exchange 3 goods 3 prophet 3 rational 3 selling 3 transactions 3 wealth 3

DOCUMENT KEY POINTS

• prohibition of riba riba means excessa predetermined fixed time related excess of weight or measure in one of the two homogenous articles in a contract of exchange a an increment on loan received by the lender benefit of delay riba al nasi ah riba al jahiliyyah quranic riba a discrepancy appropriated through exchange of goods arising from weight or measure subjec to conditions riba al fadl resolutions of the azhar islamic research academy egypt the council of islamic ideology pakistan and the islamic fiqh academy of oic have concluded that the bank interest in all its forms is riba
• principles of islamic finance prohibitions permissions

• surah al room a undesirability of riba was revealed where allah swt conveyed his displeasure on such transactions that which you give as riba to increase the people s wealth increases not with god but that which you give in charity seeking the goodwill of god multiplies manifols
• principles of islamic finance principles of islamic finance a

• surah al nissa a in response to provocations of jews and recounting their sins including charging of riba allah swt tells them about the punishment and rewards for the clear minded and for their taking riba although forbidden for them and their wrongful appropriation of other people s property we have prepared for those a painful doom for these disobedient persons
• however we will give a great reward to those among the jews who are clear minded about the truth without a grain of doubt and who believe in the quran and all other revealed books establish salah give zakat and believe in allah and the day of judgment

• surah aale imran a riba was expressly prohibited for muslims o believers take not doubled and re doubled riba and fear allah so that you may prosper
• fear the fire which has been prepared for those who reject faith and obey allah and the prophet so that you get mercy

• surah al baqarah a in response to adversaries of islam s question of paralleling profit and riba allah swt permitted sale and prohibited riba and that the matter of already charged riba was with allah those who take riba shall be raised like those who have been driven to medness by the touch of the devil this is because they say trade is just like interest while god has permitted trade and forbidden interest
• hence those who have received the admonition from their lord and desist may keep their prevoiu gains their case being entrusted to god but those who revert shall be the inhabitants of fire and abide therein for ever

• surah al baqarah declaration of war from allah swt and his prophet pbuh against those who disobey the prohibition and all previous ribavi transactions were entitled to receive principal only and that to give the debtor grace period until he can manage to clear the dues against him o believers fear allah and give up what is still due to you from riba if you are true believers
• and if the debtor is in misery let him have respite until it is easier but if you forego it as charity it is better for you if you realize

• forms of riba in loans and other transactions a varily indeed riba was in lending a exchange of radi with burney datesa riba al fadl
• consequences of indulging in riba a night of ascendance to heavensa violators subject to the curse

• outstanding debt the necessity of repaying the debt a all sins would be forgiven except o s debta a dishonor and punishment for willful defaultera a allowance of repayment time for genuine defaultera
• creditor and debtir relationship a not to accept any gift or ride from borrowera a even minute benefit transferring from debtor to creditora

• interest price of capital a main factor for unjust distribution of production results a c capital receives the whole benefit but does not share losses a c entrepreneur is discriminated by paying fixed rate of interest even in case of loss a c capital is discriminated by receiving small amount of interest when entrepreneur earns large profits a c industrial borrower receives large profits and pays small part to depositors through conventional banking net resource transfer from poor to the rich a concentration of income and wealth
• islamic finance prescribes profit and loss sharing as no one can determine the productivity of capital and entrepreneur before hand

• credit worthiness preferred over productivity and proper utilization of loan a corporate sector appropriates the funds while small businesses are neglected despite their economic feasibility islamic banks downscale their operations as they share in the results of the business and credit worthiness occupies secondary position than productivity
• the interest system promotes passive behavior and risk aversion a absence of effort affects production and productivity islamic finance brings active partners together p l sharing

• banks funds are de capitalized in interest based system p l sharing saves from this loss as depreciation in value of money is compensated through price system a c moral hazard and adverse selectionequity finance provides access to information more even resource distribution
• the conventional banking exposed to instability islamic banking working through the system of profit and loss sharing demonstrates a stable system

• profit belongs to one who bears responsibility of loss these two interrelated characteristics are expressed in the prophet pbuh s saying al kharaj bi al daman a entitlement of gain is linked to the responsibility for loss
• variable return profit sharing principle psp or the profit and loss sharing principle plsp

• asset backed financing money cannot be considered as capital a real sector activity money conventional fi fi client finance money money goods islamic fi fi client finance money counter value
• principles of islamic finance

• major uncertainty at very inception of the contract sale of probable items whose existence or characteristics are uncertain
• selling fruit before they ripen i bay al samak fi l ma a eg

• prohibition of maysir gambling refers to acquisition of wealth at others cost quran condemns maysir stating it satan wants only to sow enmity and hatred among you and hinder you from remembrance of god and from prayer
• prohibition of fraud and deception khilabah and ghishish disclosure of full information avoiding to deceive others avoiding to appropriate property fraudulently

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic micro

KeyWords

islam finance bankable contract client profit purchase financial asset microfin risk sale transact price murabahah busi sharia goodasset payment invest

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DOCUMENT REFERENCES

Number of Pages

17

Published Date

2016-09-17 00:48:27

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