Alternative finance arrangements refer to specific lending structures compliant with Islamic law, as defined under UK Finance Acts, ensuring tax levies and reliefs align with traditional interest-based frameworks.
Haram, meaning forbidden by Islamic law, particularly applies to lending or borrowing money at interest. Various schemes enable Muslims to take out loans, such as mortgages, without violating this principle of faith.
Ijarah is an Islamic finance term that refers to leasing arrangements like renting or hiring. It is a concept that allows individuals or businesses to use an asset while making periodic payments for its use without transferring ownership.
An Islamic finance concept where leasing agreements transition into ownership upon repayment of the rental payments.
A system of finance that is bound by religious laws that prohibit the taking of interest, with several techniques for profit-sharing and ethical investment.
Muqarada is an Islamic financial instrument that serves as an alternative to conventional bonds. It aligns with Sharia principles, offering a profit-sharing investment model.
In Islamic finance, Murabaha refers to a sales contract where the seller discloses the cost and profit margin to the buyer.
Musharaka is a joint venture or partnership structure in Islamic finance where profits and losses are shared among partners according to predetermined ratios.
Shirkah refers to an essential concept in Islamic finance, embodying the idea of partnership and collaboration where two or more parties share profits and losses from a venture according to an agreed ratio, underscoring principles of risk-sharing and fairness.
