Publication:
The state of Islamic finance in Europe
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Date
2024
SDG:
Abstract
The European Islamic finance industry is still in its infancy, with the first Islamic bank appearing on the continent only in the past 20 years. However, Islamic finance has a long and rich history in Europe. Its roots can be traced back to the early days of Islam when Muslim traders and scholars began to develop financial instruments and practices compatible with their religious beliefs. In the seventh century, the Arab-Muslim conquerors brought the concept of riba, or interest, which was forbidden under Islamic law. This created a dilemma for Muslim merchants who wanted to do business in Europe but were not allowed to charge interest. Instead, they developed a system of trade credit known as murabaha, which became the basis for European Islamic banking. In the centuries that followed, Islamic finance flourished in many parts of the Muslim world, including Spain, where it played an essential role in the economy during the Golden Age of Muslim rule.
Keywords
Islamic finance , Europe , Shari'ah compliant financing , Reforms
Citation
Baig, O. R., Muneeza, A., Hassan, M. K., & Biancone, P. (2024). The state of Islamic finance in Europe. In M. K. Hassan, P. Biancone, & A. Muneeza (Eds.), Islamic finance in Eurasia: the need for strategic change (pp. 7-27). Edward Elgar Publishing.
Publisher
Edward Elgar Publishing
DOI
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