Sharing Risk in Islamic Finance is The Future

(Video Series with Prof. Abbas Mirakhor - Part 5)

Q: What are the challenges faced by the global economy where Islamic finance can provide an alternative?

The point is not really to say give a label and say this is Islamic Finance.

The point is that Islam has solutions, that’s all it says.

It says my solution for your financial system is to get everybody to share risk.

Remember what happens if I want to share risk, like the example of the young taxi person that we were talking about (in Part 2).

In order for you to invest in his project, you have to get to know him. That brings people together.

With sharing brings the coming together. It solidifies the society, it strengthens social solidarity and basically makes everybody to be in it together.

And therefore, the idea is not to have a label and say this is Islamic and that’s non-Islamic.

The idea is “you have a problem, I have a solution. Please look at it.”

That’s all.

You know, it’s possible right now the UK is moving more and more to this direction of getting the banks to put more of their “skin in the game”, to make sure that they’re not going to take risks that eventually is not going to be borne by them, but by the rest of the society.

So sooner or later, all societies will move in this direction, and that is Islamic Finance.

So whatever you call it, you say “please take a look at this system, you know, and forget about islamophobia for five minutes to look at this and say: ‘This can really help the society to move forward to become prosperous and not to add more and more to poverty and exclusion.’”

This video is used with the speaker’s kind permission. It is transcribed by Reading Islam team.

What Are the Challenges of the Islamic Finance Industry?

About Prof. Dr. Abbas Mirakhor
Prof. Dr. Abbas Mirakhor: First Holder, INCEIF Chair of Islamic Finance in Malaysia