Islamic finance: from sacred intentions to secular goals?

Abstract

Purpose

The paper seeks to examine the political and socio‐economic circumstances in three different periods of the evolution of Islamic finance and how the fundamental aim of its existence altered over time.

Design/methodology/approach

Based on the existing literature on the evolution of Islamic finance, this paper explores the tensions and conflicts with reference to the dynamic changes in the political and socio‐economic landscape to understand how “intentions” changed over time.

Findings

The sacred intentions to help Muslims fulfill their religious economic obligations especially with regards to riba (usury) have been distorted with secular goals as a result of the intervention of political‐economic and social events as well as the dynamic interactions with the conventional sector. Maqasid al‐shari'ah (purposes of the law) has been unduly used to justify the innovation of financial products to compete and converge with conventional banking.

Originality/value

This editorial paper enhances the understanding of the status quo of Islamic finance in general and paves the way for country‐specific research on this indispensable issue.

Citation

Haniffa, R. and Hudaib, M. (2010), "Islamic finance: from sacred intentions to secular goals?", Journal of Islamic Accounting and Business Research, Vol. 1 No. 2, pp. 85-91. https://doi.org/10.1108/17590811011086697