The world is moving towards the worst financial mislay and the last year’s recession is also due to wrong policies. It causes the bankruptcy of millions of people in the world. The economic crack down affects everyone serving in any field. The most effectual one is the middle class and lower class people. The foremost reason of this crunch is the financial systems. They offers loan and asked you to return it with some profit or interest. They secured their lendings as well.
The problem started when it’s time to return. They need profit at any case whatever, the financial condition of the borrower at that time, either the loan adds any financial benefit to him or not. In case of lose; still you have to return the loan with profit/interest. Such miserable conditions end to bankruptcy of the borrower.
The substitute way of this dilemma is a system which shares not only profits but loses as well. Financial systems whose mission is not only profit maximization but also to contribute in the society and to develop a welfare society as the image given by the Islam.
Over the last few decades, Muslims are trying to construct a banking system based on the Shari’ah laws and give an ideal system to the world. It’s not only based on the commercial basis but also to help the society in the positive manner. The best financial system is given by Islam that works for the mankind welfare. The current Islamic system also working on Shari’ah rules, and offer loans on the basis of both profit and loss sharing. The share of profit as well as loss made the Islamic banking to be trustworthy. They have different modes of financing. These modes have their own set of principles, philosophy and conditions which made them to use as a Islamic modes because they are coherent with the Islamic laws and Shari’aa.
Musharikah financing, the word arises from the Arabic word means “sharing”. In the business concept it deals with the sharing of profit and loss. Like in the joint venture all the partners will share the profit and loss in the proportion of their investments. IJARAH is the LEASING mode, Mudarabah financing In this mode of financing, in which the investment is solely from the Islamic bank. The full money is being given by the bank. Murabahah is in the Islamic Fiqh refers to a particular kind of sale, and this mode deals with selling.
Hence Islam offers the best Islamic financial system which not only eliminates interest but also solve all the financial problems.
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