Sharia finance

Sharia forbids earning or paying interest on loans.  So Sharia finance is about the ways to get around this prohibition. Sharia finance also concerns prohibitions on using money to finance the pork or alcohol industries.

The first is not a problem for dividend or capital gains earnings because they clearly involve risk which is a requirement of Sharia investments. The problem arises with home mortgages and savings accounts.

Home mortgages are handled by having a Sharia bank buy the relevant house and then sell it back, on a monthly payment schedule, to the mortgagee plus a rental fee on the use of the house. The net result is identical to a mortgage loan.

A savings account in a Sharia bank is one where the deposited money is invested in only Sharia investments. The returns are dividends and capital gains which are put in a fund that pays out the regular market savings account interest rate. Again, this is  not really very different than a standard bank savings account except for the way the funds are invested (definitely not as secure as a bank savings account and certainly not insured by any government.)

All other Sharia finance is based on equity funds that exclude interest bearing instruments, like bonds, and avoid stocks in inappropriate (pork and alcohol) corporations. (Think socially responsible funds with an Islamic agenda.)

The multiple tools of hedge funds... options, puts, calls and arbitrage contracts are nearly all well suited to Sharia finance (excluding bets on interest rate markets such as Libors.)

The Sharia prohibition on interest was appropriate at the time of Mohammed, as Christianity took the same position. (Jews in both Moslem and Christian societies were relegated to banking.)We now see interest as a rental on money composed of a mix of risk, market pricing (national price index) and the supply of funds.

Comments

[MJ]

Dear solsticewitch13, Burgus are not Islamic, they are Arabic traditions, so is the Cutting of the womens private part is an African Tradition, Egypt and Sudan and some beleive it is from the Old Pharaon. It is Prohibited in Islam.

[MJ]

Dear Friend, and Hater.

Sharia Finance protects people from being used and dragged into being lost in debt and be buried with it, which is what is happening today.
If you have money to spend fine do it, if you dont rent a house.
All this lying of solsticewitch13
If Islam is so bad, why are there so many Christians and Jews that lived During the primetime of Islam and until today, no one was to be killed. COUNTRY CITIZENS IN A MUSLIM COUNTRY HAVE TO PAY TAXES LIKE ANY OTHER COUNTRY. Non Muslims pay TAXES in the Form of Jizzyah, where the other counterpart( Muslim Citizens) Payed the Zakat which is a Similar Tax. which in the end is back to the government. Actions of Muslims does not mean it is Islamic.

[solsticewitch13]

I cannot believe I see this,,

>>>
Let's go for zero interest, zero alcohol related destruction and Power to the Sharia!

>>

You had BETTER study political islam,, my foolish friend,,

with SHARIA comes,,

stoning people to death
cutting of limbs on opposite sides
forcing women into burquas
beheading INFIDELS,, that is US,,
female genital circumcision
the perversion of 4 wives,, and murta marriages,, and having sex slaves on their RIGHT hands,,
child brides, of 9 years old marrying depraved OLD men, in their 60's

living in the 7th century,, where freedom of even thought is controlled by the mad mullahs

go here

www.thereligionofpeace.com
www.jihadwatch.com
www.faithfreedom.org

educate yourselves,, because,, you have NO idea what it would be like living, under islamic rule.

under Sharia,, you will have 3 choices,,

1. convert

2. pay the jizya tax, and be a dhimmi,, subdued by your muslim master

3. the sword,,

and for me,, I would rather frickin DIE,, that live that barbaric world of the 7th century.

I am getting sick of all the BS on this planet caused by religions. And the so called "religion of piece", is on the top of my list.

READ THE QURAN, the SURA, and the HADITH folks,, because,, they are lying to everybody,(except dar al islam), it's called Taqiyya, lie to the Infidels,, because we all live in the land of WAR,, (dar al harb).

a WICCAN PROUD Infidel/Kuffar
solsticewitch13

imagine a world without Islam

[Pat Fauceglia]

The right and wrong of Sharia finance is not the question. The question is: "Why would Islamic traders want to invest in a corrupt, degenerative, immoral, unethical society?"

Because stupid they have a long range plan to take over the USA and will use every deceit, every nuance, every lie, every duplicitious action to accomplish this goal. They have been waiting since September 11,1683 to renew their conquest of the Western World and will stop at nothing to complete this task.

Keep your eye on the big picture. It is there for all who observe action not words. If radical Muslims would lay down their arms - some 100 small wars would end - the world would be at peace. Check it out.

[Lester Hatcher]

The two comments above suggest that the writers are poorly informed about Muslem ( or sharia) financing. a trip to securefreedom.org would be beneficial to both of them. This lie told about sharia financing is nothing more that a way to hide its true purpose until they have a very large investment in the financial worlds of the free nations of the world.This is a deceptive wau to use the tremendous profits on their oil sales to gain control of fiaancial institutions. This is all part of their plan to control the world and force islam on everyone.

[joan]

It is quite a sobering thought!
Although we want desperately to believe that the "modern" world is doing everything right, the reality is quite the opposite.
In the name of "commerce" "economic growth" and "modernisation” we have more or less destroyed the planet. The effects of such half baked modernisation is being felt throughout the globe in the guise of "global warming" "climate change" "family units breaking down" "stress" "drug and alcohol abuse" "various dangerous "viral" illnesses" "destruction of green and non green form of life"...so on and so forth...
I think a bit of "slow down" is not a bad thing...!!
We know we will be better off with low real interest rates, so why resist propensity to zero interest..? What is out dated about it? I am sure some of the problems of our planet will be solved by "back to basics" in the best possible taste!
Let's go for zero interest, zero alcohol related destruction and Power to the Sharia!

[M. Phillips]

I don't want to suggest that Sharia finance is good or bad. I love commerce and the ability of commerce to offer a product in different shapes and colors to suite each taste is a magnificent attribute. That Moslems will buy a donkey and call it a horse is fine with me, so long as they aren't told that it is a horse and so long as they don't legislate their views.