Aviation_Finance-Islamic Finance Considerations
Overview
The Islamic finance industry has seen rapid growth in recent years as financial institutions and their clients look towards exploring alternative methods of financing.
Islamic finance is an asset-based system and there has been an increase in the use of Islamic finance in the complete and partial financing of aircraft, assets which are permissible investments under the Islamic law (Sharia).
Practical Guidance
Principles of Islamic finance
The principles of Islamic finance are derived from the Sharia prescribed in the Quran, the sacred book of Islam believed to record the Word of God as revealed to the Prophet Mohammed and the Sunnah, the practices of the Prophet Mohammed.
Islamic finance is established in order to ensure that wealth remains pure and is utilised in a just manner in accordance with the following general principles:
No unjust enrichment-Riba
The charging of interest, or Riba, is strictly prohibited.
In Islamic finance, money should not be treated as a commodity and does not have any intrinsic value; it is only viewed as a means of exchange. Any return on money employed should be linked to the profits of an enterprise.