Sharīah compliance of conventional participative financing : a proposed way forward

Abstract EN

The purpose of this article is to propose a way forward for Sharīʿah compliance of interest based participative modes of financing.

The article discusses profit sharing loans, silent partnership, venture capital and angel investment as candidates for Sharīʿah compliance.

The article highlights the limitations encountered in the past for implementing Sharīʿah compliance under mushārakah and muḍārabah modes and suggests that, for successful Sharīʿah compliance, future work must fulfill the requirements of practical implementation.

The article proposes an active engagement of entrepreneurs and investors with Sharīʿah experts for developing Sharīʿah compliant participative financing.

The article is envisaged to contribute significantly as it provides an alternative approach for developing Sharīʿah compliant participative financing outside the realm of the banking system.-