Dictionary Home »
Webster's New World Finance and Investment Dictionary » Islamic finance
Islamic finance
Islamic finance definition - finance
A set of strict rules that forbid making or receiving
interest payments. To get around this prohibition, trade financing is obtained
by buying inventory that will be resold at a pre-determined price on a future
date, which is called Murabaha. Financing for capital projects is called
Musharaka, which is funding by two or more parties who may be active managers
in a partnership. Losses are shared on the basis of the capital contribution.
Profits may be shared in any way the partners decide. See also Istisna, Qardhul
Hasan, and Riba.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
Comments
Improve this definition.
Browse dictionary definitions near Islamic finance
Share on Facebook