Islamic finance is based on principles that adhere to Sharia law, which prohibits the payment or receipt of interest. The Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking covers various types of Islamic financial instruments that are used in the industry. Here are some of the main types studied in this qualification:
| 1. Sukuk | Sukuk are Islamic bonds that represent ownership in a tangible asset. They are structured to generate returns to investors without violating Sharia law. |
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| 2. Murabaha | Murabaha is a cost-plus financing arrangement where the seller discloses the cost and markup of the asset to the buyer. |
| 3. Musharakah | Musharakah is a partnership contract where two or more parties contribute capital to a business venture and share profits and losses. |
| 4. Ijarah | Ijarah is a leasing contract where the lessor retains ownership of the leased asset and the lessee pays rent for its use. |
These are just a few examples of the Islamic financial instruments covered in the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking. By studying these instruments, students gain a comprehensive understanding of how Islamic finance operates and the principles that guide it.