Foundations of Islamic Finance series
Edited by Mervyn K. Lewis, Mohamed Ariff and Shamsher Mohamad
Chapter 9: Non-interest financing arrangements in three Abrahamic religions
Judaism, Christianity and Islam view wealth as a blessing from God, and see man’s appointment as custodian imposing obligations and constraints upon its rightful use. All three religions have strong views on the acceptability of usury (interest) that have been extensively analysed in the literature. Less well researched are the principles and practices of various non-interest financial instruments acceptable in the three Abrahamic religions. This chapter seeks to cover this gap by examining the principles and practices of Judaism, Christianity and Islam towards selected financial concepts, namely partnership and equity-based financial instruments, debt-based financial instruments and interest-free loans. Religion can be seen as a set of beliefs by which a person shapes his or her life ranging from spirituality to daily affairs, including financial matters. Academic research has explored how religion (beliefs, norms, values) affects the economic decisions of individuals, groups and society at large (Iannaccone, 1998). According to Rae (2002, p.6) ‘we are seeking from Scripture general principles or norms that govern economic life and can be applied to different economic arrangements’.
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