Islamic finance is guided by Sharia principles, which emphasize ethical and moral values in financial transactions. In the Ofqual Level 5 Certificate course, students delve into the ethical considerations that underpin Islamic finance. Some key topics discussed include:
| 1. Prohibition of Riba (Interest) | Islamic finance prohibits the payment or receipt of interest, as it is considered exploitative and unjust. Instead, profit-sharing arrangements and asset-backed financing are used to ensure ethical transactions. |
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| 2. Avoidance of Gharar (Uncertainty) | Islamic finance discourages transactions that involve excessive uncertainty or ambiguity. Contracts must be clear and transparent to protect the interests of all parties involved. |
| 3. Prohibition of Haram Activities | Investments in industries such as alcohol, gambling, and pork are strictly prohibited in Islamic finance. This ensures that funds are used in a socially responsible and ethical manner. |
| 4. Social Responsibility | Islamic finance promotes social welfare and economic justice. Zakat, or obligatory charity, is a key component of Islamic finance, ensuring that wealth is distributed equitably among society. |
By understanding and adhering to these ethical considerations, students in the Ofqual Level 5 Certificate course learn how to conduct financial transactions in a manner that is not only profitable but also socially responsible and morally upright.