Takaful and Islamic Cooperative Finance
Show Less

Takaful and Islamic Cooperative Finance

Challenges and Opportunities

Edited by S. Nazim Ali and Shariq Nisar

Islamic finance distinguishes itself from conventional finance with its strong emphasis on the moral consequences of financial transactions; prohibiting interest, excessive uncertainty, and finance of harmful business. When it comes to risk mitigation, it is unique in its risk sharing approach.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 10: Commercial credit takaful

Muhammad Al Bashir Muhammad Al Amine


Despite the remarkable growth and development of the takaful industry in recent decades, a somewhat noticeable component missing in the industry is the trade credit takaful link. Trade credit takaful helps protect businesses, traders and financial institutions from the financial consequences of defaults, insolvencies and bankruptcies of their trading partners. The positive side towards the development of this market is that the shari’ah bases are clear if the structure is based on takaful principles, however, the technical and operational dimensions require further investigation. The chapter highlights the growing demand for trade credit takaful, the regulators’ support, its benefits and scope, its basis in shari’ah as well as the challenges ahead. Particular attention is given to the development of trade credit takaful in protecting sukuk-holders against the default of issuers or in enhancing the credit profile of some sovereigns to access the sukuk market. The chapter discusses how trade credit takaful in sukuk will not be an extension of credit default swaps in the conventional market due to the obvious differences. Similarly, the chapter highlights the central role of micro credit takaful in the development of the microfinance industry and in assisting in poverty eradication.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.