Sharia-Compliant Financing

Introducing Human Capital Mudarabah

When adopted in mass, Human Capital Mudarabah will form the foundation of an economy more equitable than its debt-based counterparts; where human capital is valued more than monetary capital and where opportunity is based on the merit of the individual rather than the social class they belong to.

Maisir: Easy Money

Maysir comes from the Arabic word “yisir” meaning ease. It is called this because it is associated with attempts to easily acquire wealth through games of chance.(1)
Identifying Maysir is not as easy as some make it out to be.
There are four elements that need to be taken into account when identifying Maysir:
S: The stakes
P: The probability for loss
A: Tendency to cause addiction
V: The value added to society

3 Ways To Identify Riba

Riba is unique in the strength of the verbiage used in the Quran to prohibit it.
The translation of what Allah SWT says in the Quran, Surah Al-Baqarah, about riba is:
278: O you who believe, fear Allah and give up what remains [due to you] of riba, if you are in truth believers.
279: And if you do not, then be warned of war [against you] from Allah and His Messenger. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged.
It seems then rather important for us to be able to identify riba.
In this article, I hope to enable you to do exactly this.
After defining riba, I’m going to share three simple methods you can choose from that should help you when trying to identify Riba.
There are many different definitions and understandings of riba. Based on my research, the definition I’m most convinced with, that has support in the Quran and Sunnah and enjoys the the widest amount of agreement in Muslim scholarship is the following:
Any loan of money which includes a contractual promise of benefit for the lender involves Riba.

Murabaha: Halal or Haram?

Islamic banks that use this product claim it’s not interest because the amount that Adam owes is fixed and does not increase if he is delinquent on payments. Therefore, we are simply looking at a standard sale wherein a trader buys an item for one price and sells it for an increased price.
Put differently, the argument for Murabaha is:
Does Islam allow someone to buy a car for $10,000 and sell it for $12,000? Yes.
Does Islam allow someone to make a purchase on a deferred payment basis? Yes.
From 1 and 2, neither the bank nor Adam has done anything wrong and Murabaha is permissible in Islam.
Not so fast.