Money makes it possible to acquire existing wealth for consumption or as inputs in the production process can be referred to as Finance. Today, finance is needed not only by individuals but also by institutions, private as well as public, as it helps in the production of additional wealth. If this financing activity is carried out in the light of Shariah principles, then it is known as Islamic Finance.


Therefore, Islamic finance is a financial system that is based on the real economy, backed by Ethics, and framed by Shariah. The end goal of Islamic finance is to establish social justice by reducing the gap between the rich and the poor and most importantly investing in the real economy.
The key principles of Islamic finance
1. Prohibition of interest(riba) because money is not capital but a medium of exchange. So, if I lend you 50,000 FRS, I should be paid the same amount.
2. No to speculation and uncertainty because it leads to adverse selection and moral hazard
3. Justice and fairness in business. This implies that partners in a business should contribute cash, and labor, and share the risk in the business. No risk, No profit.


In a nutshell, Islamic finance is an important model in the financial system as it respects all the 17 goals in the SDG to be attained by 2030. And it remains the only stable, just, and fair financial model.