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Dilemmas and Challenges in Islamic Finance: Looking at Equity and Microfinance

Dilemmas and Challenges in Islamic Finance: Looking at Equity and Microfinance

Hardcover

Series: Islamic Business and Finance

EconomicsInvesting & Finance

ISBN10: 1138095400
ISBN13: 9781138095403
Publisher: Routledge
Published: Mar 14 2018
Pages: 216
Weight: 1.12
Height: 0.56 Width: 6.14 Depth: 9.21
Language: English

The phenomenal growth of Islamic finance in the last few decades has been accompanied by a host of interesting questions and challenges. One of the critical challenges is how Islamic financial institutions can be motivated to participate in the 'equity-like' profit-and-loss sharing (PLS) contracts. It is observed that Islamic banks are reluctant to participate in the pure PLS scheme which is manifested by the rising concentration of investment on murabaha or mark-up financing. This phenomenon has been the hotbed of academic criticism on the contemporary practice of Islamic banking. This book explains the 'murabaha syndrome' in light of the incentive provided by the current institutional framework and what are the changes required in the governance structure to mend this anomaly.

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