Forms of Islamic finance and risk sharing

Abstract EN

A characteristic difference between Islamic banks is that they do not base their activities on loans and borrowed funds, but rely on such methods of financing as deferred (or instalment) sales, murabaha and Ijarah, as well as such types of partnership as musharaka and mudaraba.

In addition, Islamic banks adhere to the basic principles of Islamic finance, the most important of which is the prohibition of usury, and also the fact that the parties must share profits, losses and risks.

The problem of profit, loss and risk sharing raises a number of important research questions about the existence of control on the criteria for this sharing and requires a statement of the Islamic law logic in respect of guarantees between the contracting parties.

On this basis, the article is devoted to the study of the Sharia idea for the provision of guarantees provided by the parties, explaining the essence of the contracts in which there is sharing of risks and contracts in which a particular party is responsible for losses, indicating the impact of these issues on the activities of Islamic banks and their competitiveness in comparison with commercial banks.