The purpose of this paper is to provide an overview on the fast-growing
Islamic finance in recent years, consider its modern significance. Islamic
finance is a financial transaction in accordance with Islamic law, and
there are the characteristic, such as prohibition of Riba, most usually
described as usury or interest, transactions with the business against
Islamic law involving alcohol, pork related products, armaments, gambling
and other socially detrimental activities. At the same time, The Islamic
finance is based on a risk and profit sharing and loss sharing philosophy.
Establishment succeeded one another after the oil crisis in 1970’s, Islamic
bank was working focusing on the retail banking. Since second oil boom
by high oil prices, the wholesale banking, such as Sukuk and Islamic derivatives,
have grown rapidly, and the Islamic finance is running on the road of the
global finance without stopping in recent years. However, the starting
point of Islamic finance is a Muslim's poverty reduction and mutual aid,
and should reconsider the value as a social safety net. While expansion
of a wealth-and-poverty gap progresses globally, not only microfinance
or solidarity finance but also Islamic finance are becoming the business
model, which saves the socially disadvantaged people eliminated from the
existing financial system, and realizes social justice.
|