By now you should be aware of the sheer fact that Islamic finance is a global market operating through the conventional financial system. Over the years’ Islamic finance has transformed at a rapid pace globally. No wonder you should consider jumping into the bandwagon and leveraging its offerings.
Unfortunately, not everyone appreciates Islamic finance. What they fail to realize is that they are missing numerous benefits. In this guide, we set out to explain the key advantages thatIslamic finance offers. Read on below to uncover more.
Assists Financial Inclusion
Going with World Bank’s definition of Financial Inclusion, it simply means that individuals and businesses have access to vital and affordable financial products and services that are in line with their needs. It is worth noting that the conventional banking system is based on interest payment at a rate pre-set on the deposits of money.
However, payment and receipt of interest is prohibited in Sharia Law. In short, Muslims abstain from banking. But though Islamic banking, financial inclusion can be promoted and perfectly leveraged to bring a larger pool of savings in the local and global economy.
Accelerates Economic Development
There’s no arguing that Islamic finance organizations boasts profit creation and growth as their objectives. In this regard, they opt to invest in businesses based on their potential for growth and success. Thus in the Islamic banking industry, each bank invests in promising businesses opportunities and attempt to out-perform its competitors with the intention of attracting more funds from its depositors.
This, in turn, leads to a high return on investment both for the bank and the depositors. Keep in mind this situation is unlikely in a conventional bank, where depositors redeem returns on their deposits based on a pre-determined interest rate.
A lot more goes into the benefits of Islamic finance than what is included in this simple guide. From accelerating development and encouraging stability in investments to reducing the impact of harmful products and practices, rest in knowing good things are destined to follow. So, what is keeping you from leveragingIslamic finance?