If reading this, there is a good chance that you want to take advantage of Islamic finance. There is nothing wrong with taking this route if the numerous benefits destined to come your way are anything to go with. Actually, Islamic financial institutions are gaining widespread popularity, and for good reasons.
But how much do you know aboutIslamic finance? Before we get started, you need to note that numerous factors affect Islamic finance products’ market participation. People who are looking forward to following their religion and avoiding Sharia-compliant financial products tend to buy Islamic products.
Muslims and non-Muslims count on Islamic financial products to change their lives for the better. Sharia-compliant products are socially responsible, and rich and poor stand to benefit significantly. An individual without wealth likely borrows conventionally. Anyone with Islamic financial products can choose to partner with investors. In the event that a person boasts valuable knowledge or skills, he can seek funders.
If you have done a little of research on the conventional market, you might already know that there are those with money and those who need cash. These are commonly referred to as lenders and borrowers. The lender often doesn’t knowhow the borrower is spending the money, and this doesn’t matter to them in most instances.
Actually, the lender only concentrates on being paid back the interest on the loan or line of credits. Those partaking in Islamic financial products are buyers, sellers, or transaction partners, not lenders or borrowers as is the case in a conventional market. This still holds true if a bank or investment firm is involved.
Individuals and institutions that choose to invest in Islamic financial products use their money to support specific economic transactions. Any contract they sign stipulates what the money is spent on. Their investments promote economic activity, so investors can directly affect their local, regional, or national economy by promoting manufacturing, and homeownership, to mention a few.
If you’ve already made up your mind to leverage Islamic finance, then it is in your best interest to factor in the pros and cons before deciding on anything.