Role of Islamic Finance in Modern Economy

Dear Colleagues,

Traditional finance has introduced efficiency and sustainability along with its profit maximisation approach. However, Islamic finance is also a need of the modern era. The reason for this is that Islam has become the world’s fastest-growing religion in the 21st century.

After many financial meltdowns, the world has realised the importance of fairness, trustfulness, and transparency and has given equal attention to all indirect owners, which is also the basis of Islamic finance. Islamic finance prohibits exploitation of any factor of production and emphasises an equal distribution of wealth among all stakeholders without compromising the rule of equity and fairness. However, with the passage of time, scholarly research has highlighted the role of Islamic finance and its instruments in introducing prosperity for the masses and accountability for stakeholders. On one side, there is a need to observe the role of interest-free finance in reducing the cost of doing business and mobility of financial resources. Along with it, the role of interest-free finance is also needed to re-explore reducing the share of the shadow economy and improving economic growth by introducing efficiencies to the supply side and consumption side of economy. Similarly, there is also a need to address the issues of how the Islamic mode of finance can be made simpler for the better mobility of resource globally. Although the concept of socially responsible investment seems more relevant, working on Islamic finance while complying with Sharia principles can also pay a vital role in introducing fairer practices in business firms across the globe while helping to reduce the shadow economy and improving resource mobilisation.

Dr. Mamdouh Abdulaziz Saleh Al-Faryan
Dr. Zahid Irshad Younas
Prof. Dr. Khaled Hussainey
Guest Editors

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• islamic finance
• sustainability
• shadow economy
• resource mobilisation