What is Islamic Finance?
The term Islamic Finance describes sustainable financial services based on the economic-ethical principles and principles derived from Islamic doctrine. An overview is provided in this article.
Can you imagine a financial company without interest-based transactions?
Islamic Finance is not an invention from the East or a parallel financial world that exists alongside our own. Similar commands and prohibitions can be found in both Christian and Jewish doctrines.
One of the most well-known rules of Islamic Finance is the classic prohibition of interest. But how does the principle-based investor generate profit?
In the Quran, in Surah 2, Verse 275, it is stated, paraphrased:
That is because they say, “Trade is no different than interest.” But Allah has permitted trading and forbidden interest.
Islamic doctrine allows for benefits from trade and equity participation, while prohibiting any benefit from risk-free lending. However, profits cannot be generated from dealings with companies involved in the production or promotion of pork, alcohol, weapons, gambling, pornography, interest, etc.
Another important feature is the prohibition of uncertain transactions. Therefore, all transactions executed with speculative derivatives are forbidden.
Transactions with a gambling character are also rejected from Islamic sources because they do not provide any benefit to the community. Instead, gambling is a zero-sum game where the stakes of the players are merely shifted between losers and winners.
Islamic Finance is gaining more and more attention in global financial markets. At the 2015 G20 summit, the former German Finance Minister Wolfgang Schäuble stated:
Islamic Finance is becoming increasingly important for the global economy. It is therefore necessary for internationally oriented financial institutions to address the question of the integrity of Islamic Finance in the global economic system.
Wealth is a matter of trust – investment a matter of conscience
In Islamic Finance, internationally recognized ethics councils and commissions continuously develop standardized frameworks tailored to the current needs of banks and insurance companies. Among the most significant frameworks are the so-called "Sharia Standards" of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
At INAIA, we adhere to the guidelines of the AAOIFI Sharia Standards within the framework of local laws. Emre Akyel, Founder and CEO of INAIA, is an official and recognized member of the AAOIFI and certified as a "Certified Sharia Advisor and Auditor" (CSAA).
Sharia-compliant certified
To ensure that all AAOIFI Sharia Standards are implemented at INAIA, we regularly have our products reviewed and certified by Minhaj Shari’ah Financial Advisory – an independent auditor for Islamic Finance based in Dubai. Minhaj Advisory is led by reputable and internationally recognized scholars of Islamic Finance.
Additionally, a significant portion of our employees holds the "Certified Islamic Finance Executive" (CIFE) certification from the internationally recognized ETHICA Institute.
The Halal Code at INAIA
New products undergo a thorough review process (see diagram) before being added to our offerings. This is what sets us apart from other market participants and contributes to our success.
If you also wish to build your wealth fairly and responsibly, take advantage of our offerings – because we uphold values that have been overlooked in the financial crises of recent decades.
Do you have questions?
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