2.4 Islamic finance

• Islamic finance and its guiding principles
• Riba (interest): meaning and types
• The rationale behind the prohibition of riba
• Effects of riba on the individual and society
• Musharaka: rules and regulations
• Mudharaba: rules and regulations
• Murabaha: rules and regulations
• Comparing musharaka, mudharaba and murabaha
• Partnership as an alternative model of economic development
• Islamic finance for sustainable development

• justify the rationale behind the prohibition of riba in Islam
• examine the effects of riba in the society
• analyse the rules and regulations governing musharaka, mudharaba and murabaha partnerships in Islam
• assess the significance of partnership in Islam as an alternative model of economic development
• appreciate the Islamic model of finance for sustainable economic development

“What are the effects of riba in the society?”

“Why is it important to observe the rules and regulations governing partnership?”

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1. Islamic finance and its guiding principles
   40 min · 1 practice tasks · quiz
   Introduce Islamic finance and the principles that guide it.
2. Riba: meaning and types
   40 min · 1 practice tasks · quiz
   Explain what riba is and describe its two main types.
3. The rationale behind the prohibition of riba
   40 min · 1 practice tasks · quiz
   Justify why Islam prohibits riba, using justice, mercy and brotherhood.
4. Effects of riba on the individual and society
   40 min · 1 practice tasks · quiz
   Examine the harmful effects of riba on people and society.
5. Musharaka: a partnership of capital
   40 min · 1 practice tasks · quiz
   Analyse the rules and regulations governing musharaka.
6. Mudharaba: capital from one, work from another
   40 min · 1 practice tasks · quiz
   Analyse the rules and regulations governing mudharaba.
7. Murabaha: a cost-plus sale
   40 min · 1 practice tasks · quiz
   Analyse the rules and regulations governing murabaha.
8. Comparing musharaka, mudharaba and murabaha
   40 min · 1 practice tasks · quiz
   Tabulate the differences between the three Islamic partnerships.
9. Partnership as an alternative model of development
   40 min · 1 practice tasks · quiz
   Assess the significance of partnership for economic development.
10. Islamic finance for sustainable development
    40 min · 1 practice tasks · quiz
    Appreciate the Islamic model of finance for sustainable economic development.