Islamic Finance

Islamic Finance

Principles and Practice, Second Edition

Hans Visser

This thoroughly updated and revised second edition analyses the ideas behind Islamic finance, the forms Islamic finance has taken in practice and the tension between the two that may occasionally arise. Along with an expanded section on the history of the ban on interest, this second edition contains a much more extensive discussion of investment and savings accounts, sukuk and tawarruq.

Chapter 6: Special sectors

Hans Visser

Subjects: economics and finance, financial economics and regulation, money and banking


In addition to banks, there are specialized financial institutions active in various fields of Islamic finance, in particular insurance, real estate finance, portfolio investment, pensions and microfinance. Banks themselves may also engage in these activities, and in so far as they do, the discussion in this chapter is relevant for them as well. Home finance may even be a major product line for them. This chapter discusses the restrictions sharia imposes on activities in these areas and the ways financial institutions cope with them. The advocates of Islamic finance feel that there is a need for Islamic forms of insurance because in their eyes conventional insurance is tainted with riba, gharar and maysir and is therefore to be rejected.

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