Thanks for enquiring Hous. i am not intouch with the author. as part of my course i get articles relating to my study of islamic finance,banking and management. but i can take time to forward you articles dealing to mortgages that the sharia accepts and which is practice by concern and committed muslims. the islamic mortgage is refer to as Ijira contract and some U.S banks are offering this service on request. just google U.S Sharia complaint mortgage. you may get a link, i will try to forward some article. this thread may also contain some explanations. the article is long, so i am droping it in bits.
[log in to unmask] wrote: Mr. S Touray are you in constant contact with the author? If you do ,ask him what is his take on mortgage system in the USA. Also could such a property be used as a mosque.This question goes to all of you.
hous
-----Original Message-----
From: SUNTOU TOURAY
To: [log in to unmask]
Sent: Sun, 27 Jul 2008 1:34 am
Subject: AN INTRODUCTION TO ISLAMIC ECONOMICS
PHILOSOPHY AND PRACTICE OF ISLAMIC FINANCE by Shaikh A. Hamid Associate
Professor of Finance
Southern New Hampshire University
ISLAMIC ECONOMICS AND FINANCE
This article is for those who are uninitiated about Islamic economics and
finance. It contains the
Following sections:
I. INTRODUCTION
II. PHILOSOPHY OF ISLAMIC ECONOMICS
III. ISLAMIC FINANCE
IV. FINANCIAL PRODUCTS AND CONTRACTS
V. PROMISE AND PERFORMANCE
VI. PROBLEMS AND CHALLENGES
VII. CONCLUSION
VIII. APPENDIX
PHILOSOPHY AND PRACTICE OF
ISLAMIC ECONOMICS AND FINANCE
I. INTRODUCTION
To gain understanding of Islamic economics and finance, one has to firstly
understand what Islam
Connotes. In a very comprehensive sense, Islam is the way of life ordained by
the Creator for
Mankind through all of His Prophets (peace be upon them). This way of life
gained its finality
With the message of Prophet Muhammad (peace be upon him). A Muslim is one who
submits to
The Will of the Creator. Islam is rooted in belief in an unseen s
ystem.1
1. Belief in the unseen system
A Muslim believes in an unseen system that includes:
• Allah and His manifold attributes
• The Angels on whom He has entrusted various functions
• The Books He revealed
• Prophets or Messengers He sent
• The Day of Judgment
• Fate: Good and evil as ordained by Allah
• Eternal life after death
All of Man’s actions should be guided by the belief that he has been created
by Allah
Who will cause him to die and will resurrect him after death and hold him
accountable for all his
deeds -- done openly or secretly, individually or collectively. So it is a
belief in the Unseen. Life
does not end here. For a Muslim, life continues into the eternal Hereafter.
This belief influences
All spheres of a Muslim’s life – private, public, individual, collective,
family, social, economic, as
Well as the political sphere. Reward and punishment does not end in this life,
but the real reward
and the real punishment are in the eternal life to come.
2. Religion and economics
Michel Mayer, in “Instructions Morales et Religieuses, lére lesson,” defines
religion as “the set of
beliefs and precepts which must guide us in our conduct toward God, other
people and toward
Ourselves.” 2 Religion has also been termed as “a chart of conduct.”320These
and other definitions
of religion imply that it encompasses human behaviour in all its facets and
aspects.
As we know, economics is the study of human behavior in relation to how scarce
Resources should be allocated for producing goods and services and distributed
for consumption.
That is to say, economics deals with a subset of religion. Thus, religion will
have its say on how
Man deals with his economic activities.4 As one author puts it, “Every
religion has its own
‘Economic Ten Commandments’.”5
In the Holy Qur’an, Allah mentions about teachings of earlier Prophets -
teachings that
had to do with economic affairs of men; this underscores that economic
behavior is a concern of
religion.
A primary focus of religion is justice and equity. Through economic
exploitation injustice
and inequity can reign supreme. It is therefore logical that religion will
have economic
commandments to rein in the possibility of economic exploitation.
II. PHILOSOPHY OF ISLAMIC ECONOMICS
1. Islam and economics
(i) A verse in the Qur’an states:
“Woe to those who deal in fraud – those who, when they have to receive by
measure from men,
exact full measure, but when they have to give by measure or weight to men,
give less than due.
Do they not think that they will be called to account on a Mighty Day, a Day
when (all) mankind
w
ill stand before the Lord of the Worlds?”6
This and other related verses condemned economic behavior that prevailed
fourteen
centuries ago at the time of Prophet Muhammad (peace be upon him) and provide
a glimpse of
the economic system to be divinely ordained soon thereafter. Economic behavior
is tied to
accountability before the Almighty on the Day of Judgment.
(ii) Economic activities help man in fulfilling his responsibilities on
earth.7
• Piety is not a positive function of economic unproductivity.
• The more pious one is, the more productive he should be.
• The more economically productive he is, the better he should be, provided
life is kept
balanced.
One way of getting an appreciation of the Islamic concept of economics and
finance would be to
understand from the Islamic perspective the concepts of success, wealth and
goods, permissible
consumption, motives of production, objectives of production, the goals of the
firm, the right of
ownership, responsibility and freedom, cooperation versus competition,
government involvement
in the market. After presenting these concepts, we will outline the Islamic
economy’s ‘Rules of
the Game’. Thereafter, we will sketch out Islamic finance, highlight major
financial products and
contracts, briefly evaluate performance of financial institutions, and
highlight problems and
challenges before concluding.
To b
e continued from the concept of success to a Muslim.
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