Table Of ContentPALGRAVE STUDIES IN
ISLAMIC BANKING,
FINANCE, AND ECONOMICS
ISLAMIC FINANCE
AND AFRICA’S
ECONOMIC
RESURGENCE
Promoting Diverse and
Localized Investment
Muhammad Al Bashir Muhammad Al Amine
Palgrave Studies in Islamic Banking,
Finance, and Economics
Series Editors
Zamir Iqbal
World Bank
Potomac , USA
Jahangir Sultan
Bentley University
Boston , Massachusetts, USA
Mehmet Asutay
School of Government and International Aff airs
Durham University
Durham , United Kingdom
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Muhammad Al Bashir M uhammad Al Amine
Islamic Finance and
Africa’s Economic
Resurgence
Promoting Diverse and Localized Investment
Muhammad Al Bashir Muhammad Al Amine
Bank Alkhair
Busaiteen-Muharraq, Bahrain
Palgrave Studies in Islamic Banking, Finance, and Economics
ISBN 978-3-319-28834-5 ISBN 978-3-319-28835-2 (eBook)
DOI 10.1007/978-3-319-28835-2
Library of Congress Control Number: 2016940808
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G A T
LOSSARY OF RABIC ERMS
Bay Sale on credit (Le., a sale in which goods are delivered
‘Bithaman immediately but payment is deferred
Ajil or bay’
mu’ajjal
bay’ al-dayn S ale of debt. According to a large majority of Muslim
scholars, debt cannot be sold for money except at its face
value, but it can be sold for goods and services
Fatawā P lural of f atwa. Religious verdicts by a Muslim Scholar or
a resolution by a number of scholars or organization.
Gharar L iterally, it means deception, danger, risk and uncertainty.
Technically it means exposing oneself to excessive risk and
danger in a business transaction as a result of uncertainty
about the price, the quality and the quantity of the
counter-value, the date of delivery, the ability of either the
buyer or the seller to fulfi l his commitment, or ambiguity
in the terms of the deal, thus exposing either of the two
parties to unnecessary risks.
Hadith S ayings, deeds and endorsements of the Prophet
Muhammad (peace be upon him) narrated by his
Companions
Haram T hings or activities prohibited by the Shariah
Ijārah L easing. The sale of usufruct of an asset. The lessor
retains the ownership of the asset with all the rights and
the responsibilities that go with ownership.
v
vi GLOSSARY OF ARABIC TERMS
Istisna A contract whereby a manufacturer (contractor) agrees to
produce (build) and deliver a well-described good at a
given price on a given date in the future payment of the
consideration can be at the beginning of the transaction,
by installment or at the end.
Maysir T echnically, gambling or any game of chance.
Mudarabah A contract between two parties, capital owner(s) or
fi nanciers (called r abb al-mal ) and an investment manager
(called m udarib ). Profi t is distributed between the two
parties in accordance with the ratio agreed upon at the
time of the contract. Financial loss is borne only by the
fi nancier(s). The entrepreneur’s loss lies in not getting
any reward for his services.
Murābaḥah S ale at a specifi ed profi t margin. The term, however, is
now used to refer to a sale agreement whereby the seller
purchases the goods desired by the buyer and sells them
at an agreed marked-up price, the payment being settled
within an agreed time frame, either in installments or in a
lump sum. The seller bears the risk for the goods until
they have been delivered to the buyer.
Mushārakah Partnership. A musharakah contract is similar to a
mudarabah contract, the difference being that in the
former both partners participate in the management and
the provision of capital, and share in the profi t and loss.
Profi ts are distributed between the partners in accordance
with the ratios initially set, whereas loss is distributed in
proportion to each one’ share in the capital.
Ribā Literally, it means increase or addition or growth.
Technically it generally refers to the ‘premium’ that must
be paid by the borrower to the lender along with the
principal amount as a condition for the loan or an
extension in its maturity. This is also called riba al-nasia.
Interest as commonly known today is a form of riba.
Another form of riba is riba al-fadl pertaining to trade
contracts. It refers to exchange of different quantities (but
different qualities) of the same commodity. Such
exchange is prohibited in particular commodities defi ned
in the Shariah
Salam A sale in which payment is made in advance by the buyer
and the delivery of the goods is deferred by the seller
GLOSSARY OF ARABIC TERMS vii
Sharī‘ah Refers to the corpus of Islamic law based on Divine
guidance as given by the Quran and the Sunnah and
embodies all aspects of Islamic faith.
Sukūk C ertifi cates of equal value representing undivided shares
in ownership of tangible assets, usufructs and services (in
the ownership of) the assets of particular projects or
special investment activity
Takāful It is the Islamic alternative to insurance. It is based on the
commitment of the participants to make donations for
the sake of their own interest. The participants, therefore,
protect their group by payment of contributions that
constitute the resources of the insurance fund, and assign
the management of that fund to a committee of
policyholders, or to a joint stock company that possesses
the license of practicing insurance business. In the latter
case, the company assumes this job on the basis of a
remunerated wakala (agency) contract. In addition to
managing the insurance operations, the committee of
policyholders or the company also assumes the
responsibility of investing the assets of the fund through
mudaraba or investment agency
Wakalah A gency contract whereby one person appoints another to
perform a specifi c task on his behalf, usually against a
fi xed fee. The agent is liable as a result of negligence and
misconduct.
Waqf A ppropriation or tying up a property in perpetuity for
specifi c purposes. No property rights can be exercised
over the corpus. Only the usufruct is applied towards the
objectives (usually charitable) of the waqf
Zakah L iterally means blessing, purifi cation, increase and
cultivation of good deeds. It is one of the pillars of Islam.
Technically it is an obligation in respect of funds paid for
a specifi ed type of purpose and for specifi ed categories. It
is an individual duty if the criteria for making it obligatory
are satisfi ed. The government has the authority and
responsibility to collect it and distribute it to the
prescribed categories of people. The government may also
authorize shareholders to pay it personally if it is satisfi ed
that they will do so.
A
CKNOWLEDGEMENTS
All praise to Allah (s.w.t) the most Gracious and most Merciful, by whose
grace and blessing this work has been completed. I would like to take this
opportunity while relying on the instruction of the Prophet to the effect
that “whoever does not thank people does not thank Allah” to express my
thanks and gratitude to those who have contributed in one way or another
through their advice, criticism, and support in strengthening the qual-
ity of this work. Special thanks and appreciation are due to Sister Isabel
Mary Zahra Rehman for her valuable help and assistance in editing an
early draft of this book and to her husband Brother Aziz Rehman Sheikh.
Similar thanks and gratitude are due to Brother Dr Zamir Iqbal, Brother
Dr Abdul Kabir Hassan, Brother Shafi q Flynn, Brother Dr Mohammed
Burhan Arbouna, Brother Dr Ahmad Arrifai, Brother Kamal Abdelkarim
Hassan, Brother Mohamed Ikram Thowfeek, Brother Naeem Thowfeek,
Brother Imad Ali, Brother Akram Traboulsi, and Sister Kifah Rashid. May
Allah rewards them all for their help and assistance. However, any short-
coming or mistake remains the author’s own responsibility.
Finally, I express my sincere indebtedness and gratitude to my family
for their support, patience, perseverance, and encouragement, particularly
my wife and children.
ix
Description:This book analyzes Africa's unprecedented economic growth, the state of its financial sector, and the varied opportunities for Islamic finance investors. It considers the role - potential and realized - of Islamic finance in fostering financial inclusion in areas such as banking, microfinance, capit
