Risk-Taking in Islamic Debt Financing: Maqasid Perspective


  • Muhammad Shahrul Ifwat Ishak UniSZA




Risk Management, Islamic Finance, Maqasid al-Shariah


Since the past six decades of its emergence, Islamic banking industry has been widely recognized as an alternative financial system since it could offer similar services like its conventional counterpart. Islamic banking products must be free from Shariah prohibited elements, mainly riba’ which is strongly forbidden. In fact, riba’ is characterised with the risk absence which the risk is fully transferred to one party, resulting this practice is part of exploitation and discrimination. Alternatively, Shariah allows any financial contract as far as it is fair in terms of risk-taking among involved parties. Nevertheless, the current financings offered by Islamic banks particularly debt-based ones are claimed similar to conventional loan. Debt-based financings are systematically organized, by transferring the whole risk to customers in which it should be borne by both parties. However, others said those financings are still exposed to a certain degree of risk. Thus, this paper aims to analyse the issue of risk-taking in debt-based financing from the perspective of M. This subject provides a holistic view on Shariah as well as it plays a significant role in harmonizing between revelation and reality. Based on library research, it is found that there is no strong evidence that debt-based financings should be prohibited because of the issue of risk-taking. Nevertheless, controversial practices that surrounded with those financings should be considered by Islamic finance players. While this study has limitation in terms of the data, it provides a philosophy discussion and deep analysis on the issue.


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How to Cite

Ishak, M. S. I. (2023). Risk-Taking in Islamic Debt Financing: Maqasid Perspective. Journal of Management and Muamalah , 13(2), 1 - 11. https://doi.org/10.53840/jmm.v13i2.150