Islamic Finance Explained

What is Shariah law?

Shariah or Islamic law is a set of obligations and guidelines that outline good moral behaviour for Muslims in every aspect of life.

Under Shariah law, making money from money, such as charging interest, is usury and therefore not permitted.

For devout Muslims this makes it difficult to participate in a range of financial products that many people take for granted, from pensions and life insurance to credit cards and interest-bearing current accounts.

Wealth should be generated only through legitimate trade and investment in assets. Investment in companies involved with alcohol, gambling, tobacco and pornography is strictly off limits - an aspect that aligns Islamic Investments with Ethical Investments.

Until now the only options for British Muslims wanting to buy their own home has been to buy with cash, rent, or else put their religious beliefs aside and opt for a conventional mortgage.