American Muslims are turning to Islamic law to help them run their businesses, according to an Associated Press report (June 22).
The cornerstone of Islamic business transactions is the religion’s ban on interest payments, or usury. The Koran is specific in requiring Muslims to share the risk of an investment while sharing the profits from it and prohibits contracts which might involve taking unfair advantage of one partner over the other. As one might expect, starting Muslim-owned businesses has been difficult.
“Entrepreneurs say they faced the problem of reaching a widely dispersed Muslim population and finding money to finance transactions in a system driven by interest. That’s why they started small. In the early 1980s most of the businesses were investment companies that bought stocks considered halal, or legal under the Sharia [Islamic law]. Then came leasing companies and housing cooperatives,” writes Donna Abu-Nasr.
So today, a growing number of Muslims can and are turning to these Sharia-based financial institutions for making major purchases. Muslim investment houses operate as regular companies do, except that executives examine each stock to make sure it is halal, excluding stocks involved in banking, gambling, alcohol and pornography.