Question

In terms of ethic & moral, how could the Islamic finance be considered an alternative to conventional finance?

Answer 1

Islamic Finance is an interest-free system. Conventional finance would charge a low earner with a high-interest rate. This logic is deemed unethical in Islamic Finance. Islamic Finance prevents investments in industries like alcohol, tobacco, pornography as sinful. Gambling is also banned, thus there are no derivative products under Islamic Finance. Speculation is also Banned in Islamic Finance. The Financing should come from deposits rather than by taking loans. This is how Islamic Finance could avoid the unethical or immoral activities of conventional finance and is thus gaining traction.