We need more media coverage so that it will pressure Islamic banking system to move more gratually toward equity based financing and away from lending based . Thank you. Wasallam
The actual question is that you do not have access to that money till retirement, and how will you pay zakat on money that you do not own. If you find a let me know.
Interesting perspectives on financial inclusion and sustainable wealth creation but I do not agree that debt financing is rent seeking in all cases. I’ll like to read his book and watch more of your concept of finance and banking. It seems interesting and I partly agree with him on equity financing being more inclusive. But you didn’t amplify the inherent risk in equity financing too. Not everyone/investor has patient-capital to deploy to equity.
Trying to understand the view from Cur8 and what you speak about Muslims awareness of the world of money. You have two criteria set out with investor type. What about the Muslims who don’t fit into this criteria? Is there a way you can open up to more than just these two types of investors and if not, isn’t this part of the problem..
Muslim hold money in savings and don't know the basics of money. The fiat system. If they knew with awarness comes change. Imagine if we all pooled our money together and opened a bank with: Mudaraba Profit-Sharing: Bank and depositors share profits, no interest charged. Leasing (Ijara): Bank earns from leasing assets, not loans. 100% Reserve: Only loans backed by real deposits, no credit creation. Service Fees: Operational costs covered through transparent service fees. Crowdfunding: Community-led funding for public projects, managed by the bank. This system aligns with Shariah principles, avoids interest (riba), and promotes real economic activity without relying on artificial credit creation.
Here is my 2 cents on the matter Bismillaah. In the name of Allah, the most Kind and most Merciful. Governments have a responsibility to be prudent and act in the best interests of their citizens and economy. This responsibility extends to providing welfare as well as ensuring citizens have strong personal purchasing power. Of course, this all has to be done in a halal manner which is compliant with Quranic Sharia and pleasing to Allaah. This means removing ribah (interest) and coming up with alternative models - even a complete reworking if necessary - to ensure such a society. It is also worth bearing in mind that “Halal” is not always the same as “Islamic”. For example you can slaughter a non-halal animal using the ‘Islamic’ zabiha method but it is still haram to consume because Allaah prohibited it in the book of guidance, the Holy Quran. Therefore, Muslims must always be mindful of what is Halal (what Allaah decreed permissible) and what is Islamic (sometimes merely an applied label to something to make it sound virtuous). From my studies, the best way to have a sustainable and strong economy is thus; - print less money - tax responsibly the citizens (these two alone offset the inflationary effect that overprinting has on a economy) - spend the tax money into SUPPLY (rather than burdening taxpayers with debt) into infrastructure projects - thus creating jobs, services and facilities for people which bolster the economy and remain permanent thus always useful. *** - look for strong trading partners and trade with your own domestic currencies at a fixed rate. For instance, Pakistan and Iran could trade between each other with Riyals and Rupees - at a fixed conversion rate of course and for a fixed quantity to stop corruption and overprinting of money. - Also, establish a minimum income (not wage, but annual income) and use that as the basis of rate of conversion between one another so you can trade at a fixed rate thereby eliminating the corruptive evil of floating exchange rates. *** Investment in infrastructure is the basis and bedrock for any civilised and functioning economy: Roads Motorways Railway Lines Airports Bridges Canals Rivers Reservoirs Dams Agriculture Schools Hospitals Health services Electricity power grids Wind Power Solar Power Direct plummed water Gas lines Sewage system Waste disposal means Recycling centres Water desalination Etc etc etc Once these have been created you can DESTROY the inflationary effect of that money through taxation (toll roads, entrance fees at hospitals, tax stamp duty on public services tickets etc) and then DO NOT recirculate it. So, simply put; - Create the money - Spend it into supply via infrastructure projects - Create jobs as a consequence - Tax the projects at a low cost (but create high volume) and do not recirculate the money as a counter-inflationary measure. Any excess money beyond the needs of supply (thus inflationary) can be called the Optimum level of Economic Activity can simply be destroyed and thus never recirculated. You only just need the cash to allow this to happen in the first place. The halal model is correct but it simply needs scaling up and in line with modern currency. However, the key thing is to keep it halal and pleasing to Allaah. Start small, work up. Keep investing into projects to reinforce and strength the economy inshaAllaah
Also. I'm a bit confused. Using your casino analogy, I feel rather than work towards leaving the casino, why should we work towards becoming entrepreneurs within the same system???
Such an important area of knowledge and understanding required by Muslims in the modern day. We have to collectively either make the change or work towards achieving change through our combined spending and political power.
Osama from Glasgow here, thanks for the informative discussion. Two questions: 1) On the nature of money creation, how are the disadvantages and risks of the fiat system different from a gold based or crypto system? Rather than computers creating money, miners do. The latter also sound potentially inflationary and arguably more out of control. Why is it better and more stable? 2) On a shift to equity-based investing, won’t there always be low risk lending? Govts will not want to do equity shares on building bridges and hospitals. So sukuk type investments sound like they would always be there. From a demand side of things, won’t businesses prefer this type of capital than equity? One costs a few percentage on the investment each year, the other substantially gives away the business. How will that demand side by altered?
