London School of International Business (LSIB)

What are the key principles of Islamic finance covered in the 9 months Level 5 Certificate Concepts of Islamic Finance and Banking course?

Key Principles of Islamic Finance Covered in the Level 5 Certificate Concepts of Islamic Finance and Banking Course

Islamic finance is based on principles that adhere to Sharia law, which prohibits the payment or receipt of interest (riba) and promotes risk-sharing and ethical investments. The Level 5 Certificate Concepts of Islamic Finance and Banking course covers the following key principles:

Principle	Description
Prohibition of Riba	Islamic finance prohibits the payment or receipt of interest, as it is considered exploitative. Instead, profit-sharing arrangements are used to ensure fair and ethical transactions.
Risk-Sharing	In Islamic finance, risk-sharing is emphasized, with both profits and losses shared between parties. This promotes a more equitable distribution of wealth and encourages responsible investment decisions.
Asset-Backed Financing	Islamic finance requires that all transactions be backed by tangible assets, ensuring that investments are based on real economic activity rather than speculation.
Ethical Investments	Islamic finance promotes ethical investments that are in line with Islamic principles, such as avoiding investments in industries that are considered harmful or unethical.

By understanding and applying these key principles, students in the Level 5 Certificate Concepts of Islamic Finance and Banking course will gain a comprehensive understanding of Islamic finance and its role in promoting financial stability and ethical investment practices.