Principles of Islamic Finance

Principles of Islamic Finance
Islamic finance principles

The functioning of the Islamic financial system is governed by Islamic law. However, it is important to point out that one cannot understand the operating principles of Islamic law on the basis of laws and methods of analysis used in conventional finance. Indeed, it is a financial system which has its own origins and which is based directly on religious precepts. Thus, if one wishes to adequately apprehend the different functioning mechanisms of Islamic finance, one must above all realize that it is the result of the influence of religion on morality, then of morality on law. , and finally economic law leading to finance.

What is Zakat?

Every year, especially during the month of Ramadan, Muslims in large numbers around the world pay a compulsory financial contribution called Zakat, whose root in Arabic means "purity". Zakat is therefore seen as a way to cleanse and purify income and wealth from what can sometimes be worldly and impure means of acquisition, in order to gain God's blessing. Being one of the five pillars of Islam, the Quran and hadiths give detailed instructions on how and when this obligation should be fulfilled by Muslims.