Islamic Finance

Additionally in this Middle East International Study Tour class, we had professor Mohammad Fadel come in and describe the details, mechanics and rational of Islamic Finance.

While most people are familiar with Islamic Finance as simply "not charging interest" there are many more details which make up the rich tapestry of Islamic Finance.


The first note is that conformity with Islamic finance is voluntary. I think this might have been a point many members of my class (myself chief among them) got hung up on. Especially when we asked questions about how this law affected goodwill for M&A, sale of IP or brand equity or options or sale of receivables.


Some of the key takeaways for understanding Islamic Finance include:

• a strong association with tangible assets
• a general prohibition against floating or uncapped risk elements
• an emphasis on partnership, ownership and charity

There are certainly going to be more study before I can even begin to understand the find details, but this is certainly an interesting consideration for global finance.