Capital and Profit Sharing in Islamic Equity Financing

“Capital and Profit Sharing in Islamic Equity Financing” offers a comprehensive analysis of the contemporary challenges surrounding capital and profit sharing within Islamic financial institutions. In a world dominated by interest-based debt financing, the book addresses the evolving nature of money and monetary value, and its implications on Islamic finance.

The text delves into the intricate complexities surrounding capital and profit sharing, shedding light on the practical relevance of these concepts in the operation of Islamic financial institutions. It provides fresh insights into the relevant Shari’ah regulations governing capital and profit sharing arrangements.

One key focus of the book is on joint ventures financed by Islamic banks. It meticulously examines Shari’ah requirements concerning the presence and adequacy of capital at the commencement of such ventures, particularly within the context of modern monetary systems. Additionally, the book explores the permissibility of converting debt into capital, as well as the feasibility of equity ventures based on non-monetary forms of capital.

Furthermore, the text critically evaluates the prevailing methods used by Islamic banks to determine profit sharing ratios between the bank and its clients. It proposes alternative approaches aligned with Shari’ah objectives, aiming to ensure equitable distribution of profits and adherence to Islamic principles.

The author also extensively discusses various clauses commonly found in modern equity financing agreements, offering a nuanced examination of their compatibility with Islamic finance principles.

Overall, “Capital and Profit Sharing in Islamic Equity Financing” serves as a valuable resource for scholars, practitioners, and policymakers involved in Islamic finance. By addressing contemporary challenges and proposing innovative solutions grounded in Islamic jurisprudence, the book contributes significantly to the ongoing discourse on ethical and sustainable financial practices in the Islamic world.