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Explain three principles of Islamic finance.

      

Explain three principles of Islamic finance.

  

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Francis
Explain three principles of Islamic finance
(i) Paying or charging an interest is strictly prohibited. Islam considers this as an exploitative practice that favors the lender at the expense of the borrower.
(ii) Investing in businesses that involve prohibited activities is forbidden (haram).
(iii) Speculation (maisir) or gambling is prohibited. Therefore, Islamic financial institutions cannot be involved in contracts where the ownership of good depends on an uncertain event in the future.
(iv) Uncertainty and risk (gharar). Islamic finance prohibits any participation in contracts with excessive risk and/or uncertainty.

francis1897 answered the question on November 7, 2022 at 09:14


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