The Widad course studies the structure of the Islamic banking and financial sector, including its theoretical foundations, products, performance, Islamic financial instruments, and risk management issues.
Islamic finances are banking or financial activities that comply with Sharia (Islamic law), and therefore do not allow interest to be charged and stay away from businesses that are prohibited by Islamic laws such as alcohol, pork, pornography and gambling. In reality, the practice that is called Usury is prohibited in all Abrahamic religions (Judaism, Christianity and Islam) but that is for another day.
Financial institution that does not charge interest? Yea!
Also according to Islamic law, money cannot be used to generate more money and to charge high interest rates, especially for those in need, the practice is considered unethical and therefore prohibited.
And how do they support themselves?
Islamic banks are not involved in risky and speculative investments. It is necessary to have what is sold, therefore, conventional derivatives such as futures, swaps and forward contracts are not allowed. Instead, banks should be ahead of their investors, identifying the risks involved beforehand and ensuring that investors understand what they are investing their money in. This is largely the reason why the Islamic financial sector has escaped the direct repercussions of the 2008 financial crisis.
The first Islamic bank was born in Pakistan and failed during the 1970s. In that period, commercial banking operations using Islamic finance were the most common type of Islamic banking. In 1980, Islamic banks started to syndicate and finance projects. The 90s brought the idea of equity and Ijarah (leasing), which greatly diversified the options in the sector. The 2000s took institutions to another level. This is due to the emergence of sukuk and other structured Islamic financial assets that have emerged, along with the proliferation of a robust capital market.
The central idea of these institutions is the sharing of profits and losses. The Islamic bank is not just a provider of funds: it comes in as a kind of partner in the operation.
In short, there is an emphasis on stocks and investments in the real economy. You have to work to make a profit, just lending money to someone who needs it doesn’t count as work. Although it sounds a bit paradoxical, and in fact it is, Islam does encourage the maximization of wealth, it is allowed to earn money, however, as long as it does not create a situation of social imbalance or that violates the rules of Islamic justice and morals. kursus keusahawanan is also available in Widad if you are looking to reach a bigger milestone in your financing career.